Aircraft leasing firm Avolon has signed a memorandum of understanding for a bulk order of new Airbus Group (EPA:AIR) jets at the Paris Air Show, which Rolls-Royce Holdings PLC (LSE:RR.) is set to power.
Airbus will supply Avolon with 20 new Rolls-Royce Trent 7000-powered A330neo jets under the deal, with these set to be delivered between 2026 and 2028.
Dublin-based Avolon leases commercial jets to the likes of easyJet PLC, Jet2 PLC (AIM:JET2) and Wizz Air Holdings PLC (AIM:WIZZ), currently boasting a fleet of 616 Airbus aircraft, alongside 214 Boeing jets.
“Our recent aircraft orders and commitments reflect our confidence in the long-term growth trajectory of the aviation sector,” Avolon chief executive Andy Cronin said.
The order for wide-body jets marks a boost in confidence for the long-haul sector, which has struggled to keep up with the recovery of short-haul aviation in recent years.
Rolls-Royce is confined to the long-haul sector meanwhile, only offering engines for larger jets such as the A330, A350, A380, Boeing 777 and 787 planes, with the latest deal marking good news for the FTSE 100 manufacturer.
An order for 40 A350s by Air India on Tuesday will also see Rolls-Royce powering new jets with Trent WXB engines, which it is paid for based on the number of flying hours racked up by the airlines.
Optimism around the booming short-haul sector has been reflected at the air show, with Avolon itself penning an order for 40 new narrow-body 737 MAX jets from Boeing on Tuesday.
Avolon’s latest deal will also see a previous order for 50 Airbus A320neos converted to slightly larger, but still narrow-body A321neos meanwhile.
Rolls-Royce shares climbed 0.8% to 158.3p, while Airbus remained flat.