Old Boeing jets are gaining demand as the grounding of Max 737 planes have entered sixth month. The rental rates have increased as the airlines are turning to old jets to help meet the growing demand. Phil Seymour, the CEO of IBA, which is an aerospace consulting company based in London said that the older models of the planes, Boeing 737-800s are becoming priceless at this moment.
The lease rates for some of the old planes has increased by 40% and has become $300,000 after the grounding of the Max 737 planes in March following two fatal crashes leading to the loss of nearly 346 lives. The investigators of the crash had suggested flight-control software which pushed nose of both the planes down in the Ethiopian Airline crash and in Lion Air. A software fix is being tested by Boeing and they expect the planes to restart their service by the fourth quarter.
Michael Inglese who is the CEO of Air castle which is a leasing firm said that some of their customers whose older 737 jet leases are expiring have been extending their agreements and the increased demand has been a great benefit to their company. When the planes were grounded in the month of March, the customers had expected that the jets will be back in service soon however this did not happen. For over 50 years, Max 737 had become the staple for airlines. It was a single-aisle plane which could fly short as well as medium-haul flights where nearly 150 passengers could fit in.
Some of the leasing firms said that they are out of 737-800s and other old models but even then some of the airlines are still trying to get them. The CEO of Fly Leasing, Colm Barrington said that all the B737s have been leased by them this year and said that the re-lease rates for the B737-800s will be increasing as there is a huge demand for them.