Boeing Sells Airbuses

Business is booming at Boeing's Aircraft Trading Group, and its president, Dinesh Keskar, has a warm spot for Singapore.

That's because Singapore Airlines is the source of the 17 Airbus A340-300s that will flow through Keskar's books after Boeing took them in part exchange for 10 Boeing 777-200ERs. The deal made headlines a couple of years ago when SIA decided to go with the 777s instead of the A340s it had ordered, forcing Boeing to take and sell almost-new competitors' airplanes.

Keskar placed the first five A340s last year, leasing three to Cathay Pacific and two to Kalifa Airways. This year he will take another five at a rate of one every two months, beginning in March. "We are already close to placing them," Keskar told Show News. While most of the A340s will have a few thousand flight hours on them when handed over to Boeing, the last two will be absolutely brand new.

Airbus had declined to support the aircraft once they are in Boeing's hands, and Keskar says while this was an initial concern enough third party MRO providers such as Lufthansa Technik, Sogerma and Air France Industries have offered total support. This certainly helps in placing the aircraft, "and to move them in a timely fashion is a real morale booster," he said.

Boeing Aircraft Trading placed a total of 11 aircraft last year, compared with 15 in the period before. While Keskar wants to plan a steady growth for the group, he is somewhat at the mercy of Boeing's commercial salesmen as he receives all the trade-ins taken as new aircraft are sold. This year, for example, he faces the arrival of 24 ex-TWA Boeing 717s from American Airlines beginning in the second quarter, as well as some MD83s and used 747 freighters, for a total of 40 aircraft. "It is really difficult right now to move some kinds of widebodies, and this area is going to be more challenging than last year," he said.

Keskar has few reservations about moving the 717s, most of which are almost brand new. "Some are six months old, some only two months. They still have the brand new smell-and you can lease them for less than the cost of a new airplane," he said. Keskar believes the 100-seater is ideally suited to 500-mile routes in China, the Philippines and South America, "so I am looking at those places very carefully."

The group was initially set up to sell aircraft taken in trade, but in today's environment of cheap money the focus has shifted to leasing. Aircraft on the books are moved to other areas of Boeing, such as Boeing Capital, when they are placed and Aircraft Trading's job is done.

But a number of aircraft remain in inventory, and Keskar has several parked in the desert including a couple of 757s, a 767 and two 747s "as well as a couple of 30-year-old 747 beasts that nobody wants.

"The time has come to do something about those," he said. "I think the world is running out of beer cans and needs some help."

By John Morris