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Air Lease (AL) and the Boeing 737 MAX models
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Air Lease (AL) has the Boeing 737 MAX 8/9 models in its current fleet. I have not yet found the percentage of the fleet these planes compose. These models do make up a considerable portion of the planned additions to the AL fleet in the next 5 years. According to the AL web site these 2 models are approximately 1/3 of the planned additions to the AL fleet in the next 5 years.
The issues surrounding these planes have caused a slowdown in production. This may cause a slowdown in the AL fleet expansion.
Other possible problems the 737 issue may cause AL include the following:
- Reluctance of airlines to lease the 737 MAX models
- Need to replace the 737 with other models
- Extended time period needed to implement, test and approve the software fix
- The addition of an FBI and FAA investigation into the 737 MAX approval process
If you believe these issues may last longer than your investment horizon for AL then maybe now is not a good time to invest in AL.
However, if you are an optimist and believe these issues will be resolved in a time period relatively short compared to your AL investment horizon, then the recent drop in AL share price might be a good opportunity to buy AL.
Russell Malley
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Air Lease (AL) and the Boeing 737 MAX models
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