PARIS – Boeing won its second major order for the Boeing 787-9 Dreamliner at the 2017 Paris Air Show Monday, as lessor AerCap placed a firm order for 30 Boeing 787-9 Dreamliners.

The order makes AerCap the largest customer of the Boeing 787 Dreamliner, as it has now purchased 122 frames in all. 55 of those frames have been delivered, creating a new backlog of 67 Dreamliners. The order is worth $8.1 billion at list prices.

“The addition of these 30 Boeing 787 aircraft to our portfolio makes us the world’s largest owner of 787 Dreamliner,” said AerCap CEO Aengus Kelly. “This strengthens our ambition to satisfy our customers’ demand for an aircraft they truly value due to its economics, operating efficiencies and high levels of in-cabin comfort and innovation.”

“AerCap understands the value proposition the 787 brings to its airline customers,” added Boeing Commercial Airplanes President and CEO Kevin McAllister. “We appreciate their continued confidence in the Dreamliner, and we’re excited to have them become the largest 787 customer in the world.”

AerCap is a major Boeing customer. In addition to the 787s (22 787-8s and 100 787-9s), AerCap is also a customer for 445 Boeing 737s (both 737NGs and 737 MAXs) and 61 Boeing 777s, both owned and managed. It is the world’s largest privately held aircraft lessor and holds that role after acquiring International Lease Finance Corp (ILFC) back in 2014.

Boeing breaks its 787 rut 

2016 was a rough year for Dreamliner sales at Boeing, as the Chicago-based manufacturer sold just 58 (net) 787s for the calendar year, ending the year with a backlog of 1,200 frames against 500 deliveries.

Given that Boeing is producing nearly 140 787s per year, the anemic sales were problematic for Boeing as they meant that the backlog (time wise) actually shrunk year-over-year.

Year to date (YTD) in 2017, Boeing had won just 23 net 787 orders prior to PAS. But in one (really two fell swoops), AerCap and Chinese-lessor CDB Aviation added 38 additional frames to Boeing’s 787 ledger for the year, bringing the total net order book for the year to 61 frames, already ahead of 2016’s slow pace.

More importantly with the order, Boeing inches ever closer to fulfilling the 787’s accounting block of 1,300 frames (currently at 1,261). As a reminder, Boeing’s 787 deliveries won’t add anything to the company’s profit-loss statement until delivery of 787 #1301, so additional sales that push the Dreamliner over that total could provide a considerable increase of certainty to Boeing’s future earnings, helping to boost the company’s stock.

AerCap isn’t scared off by Dreamliner’s uncanny valley; more lessors to come?

One of the factors holding back airlines from ordering the 787 over the past eighteen months has been a lack of available delivery slots. The 787 is functionally sold out (no airline can get more than 4-5 delivery slots) until the early 2020s, and combined with the low price of fuel, airlines don’t have much urgency to buy new Dreamliners.

We’ve dubbed this current period an “uncanny valley” for the Dreamliner, as the plane remains popular amongst its customers who currently don’t have much incentive to buy more, causing the 787’s backlog to shrink.

But with the two orders from lessors, Boeing may have hit on a silver lining to its current predicament, as lessors don’t need to have a specific customer assigned for a post-2020 delivery slot yet, but can be assured that there will be demand for the Dreamliner.

Admittedly, Boeing probably gave a bit of a discount to AerCap to secure these orders. But that ability to lock in attractive pricing may now end up pushing more lessors to order Dreamliners in the coming months, which is a tradeoff that Boeing is probably willing to make.