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Airlines extending leases on gas-guzzling 747s on cheap oil bet

[TOKYO] Airlines are extending leases on gas- guzzling four-engine planes on a bet that fuel prices will stay low for as long as the next three years, the world's biggest airplane lessor said on Thursday.

We're getting "a boost we did not think we would get," AerCap Holdings NV Chief Executive Officer Aengus Kelly said in an interview on Thursday on Bloomberg Television. "The gas-guzzler type airplanes, 747s, we had assumed all of these airplanes would be scrapped. Airlines are saying we think fuel is going to stay low for 18, 24 maybe 36 months."

Airlines are eliminating fuel surcharges as fuel prices move below the levels established for adding the extra fees. Singapore kerosene has slumped 44 per cent in the past year to US$41.49 in trading Wednesday.

Chinese demand for airplanes remains robust and the lessor doesn't see a drop-off in demand there, Mr Kelly said. Air traffic in China is growing 10 per cent to 12 per cent a year, he said.