Boeing Co. (BA) won an order for $8.8 billion of jets from BOC Aviation Pte as the aircraft lessor made its biggest-ever purchase to help meet surging travel demand in Asia.

Most of the 82 planes are from Boeing’s top-selling 737 family, split between 50 of the upgraded Max 8 and 30 of the current -800 version, Singapore-based BOC Aviation said today by e-mail. BOC Aviation, a unit of Bank of China Ltd., also will take two wide-body 777s.

“We want to be in the younger end of the market,” BOC Aviation Managing Director Robert Martin said in a telephone interview today. “We want the most fuel-efficient planes.”

The purchase builds on BOC’s decision last month to buy 43 jets from Boeing competitor Airbus Group NV (AIR), which also picked up a sale of $11.8 billion of planes to Japanese lessor SMBC Aviation. China Aircraft Leasing Group Holdings Ltd. (1848) has also said it plans to expand after becoming the region’s first lessor to sell shares to the public, with a transaction last month.

BOC Aviation’s order for the narrow-body 737s, the company’s biggest aircraft acquisition, will help meet growing demand for the latest planes including the Max, Martin said.

“If you look forward in the next seven years, we’re in a transition for the 737 aircraft,” Martin said. “You have somewhere in the mid-20s of operators already committed to the program, but we can see potential for that to go up to easily 100 operators. So we want to make sure we’re part of growing that program.”

Airbus Rivalry

For Chicago-based Boeing, the sale is a boost in its rivalry with Airbus in sales of single-aisle planes, the workhorses of global airline fleets. The 737 competes with the A320 jet family from Toulouse, France-based Airbus, and the Max models with upgraded engines are challenging the new A320neo.

BOC Aviation said it will receive the 737s from 2016 through 2021. A Boeing statement announcing the transaction didn’t give a delivery date for the two 777-300ER jets in the transaction. The 777 is the world’s largest twin-engine plane and is typically used on long-haul routes. Bloomberg News reported in July that Boeing and BOC Aviation were in talks about a purchase of at least 50 Max jets.

Boeing rose 0.7 percent to $128.33 at the close in New York. That pared the stock’s decline this year to 6 percent, trailing the 8.1 percent advance for the Standard & Poor’s 500 Index.

Delivery Schedule

The list value of today’s purchase was derived from Boeing’s catalog prices, on which buyers usually get a discount.

Counting all its orders, BOC Aviation projects receiving an average of 27 planes a year starting in 2015, while also disposing of 20 to 30 annually, Martin said.

The lessor expects to pick up more planes from Airbus and Boeing that were earmarked for other buyers and then not taken, Martin said. BOC Aviation received eight aircraft that were intended for other customers, he said.

“I think we’re going to see more of that,” Martin said. “It’s not finished yet. I could do another $1 billion of capacity in 2015 if need be.”

BOC Aviation plans more bond sales this year and next year and will also tap banks to finance the plane purchase, Martin said.

China has said it will encourage lessors to look for opportunities overseas while Hong Kong billionaire Li Ka-shing’s Cheung Kong (Holdings) Ltd. said earlier this month it submitted a preliminary proposal for some planes of Awas Aviation Capital Ltd.

Air travel demand in Asia is projected to expand 5.7 percent in the four years through 2017, the second-fastest pace in the world, with routes within or connected to China being the single largest driver, according to an International Air Transport Association’s study last year.

Airlines globally will buy aircraft worth $4.4 trillion in the next two decades as more Indians and Chinese fly, Airbus said last year.

(Source: Bloomberg)