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Tariffs could hit supply chains, AerCap ( AER ) head says

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Would also hinder Boeing's ( BA ) efforts to generate cash

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Priority should be to streamline jetliner regulation

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Jet and parts shortages could last years

(Adds context, Russia and China comments, from paragraph 8)

DUBLIN, Jan 13 (Reuters) - AerCap ( AER ), the world's

largest aircraft leasing company, said on Monday that potential

new trade tariffs floated by U.S. President-elect Donald Trump

could hit supply chains and hinder planemaker Boeing's ( BA )

efforts to restore much-needed cash.

AerCap ( AER ) CEO Aengus Kelly said the biggest priority for Boeing ( BA )

and U.S. regulators should be to streamline certification of the

737 MAX 7 and 737 MAX 10 jets as well as the long-delayed 777X.

Trump has pledged tariffs of up to 60% on global goods to

protect U.S. workers in a move that experts say would probably

draw retaliation from Europe and elsewhere.

"We'll have to wait and see ... what's in the detail. A lot

of parts that are supplied to Boeing ( BA ), Airbus and

Embraer ( ERJ ) aircraft are common," Kelly told Reuters on

the sidelines of the Airline Economics conference.

"What would you do with an engine that's partly made in

France? Are you going to put a tariff of 20% on that engine? Is

that counterproductive?" Kelly added.

Boeing's ( BA ) largest engine supplier is CFM International, which

is owned by GE Aerospace and France's Safran.

"Boeing ( BA ) needs cash. It has to convert inventory into cash.

Tariffs don't help that," Kelly said. "How do you get cash? You

deliver airplanes. To deliver an airplane, it must be certified.

If it's not certified, there's no chance of getting cash. That

is what I would say should be the number one focus," he added.

Boeing ( BA ) had no immediate comment.

Asked if Boeing ( BA ) had turned the corner under new CEO Kelly

Ortberg after a protracted corporate crisis, the AerCap ( AER ) CEO

said: "I certainly hope so. I think Kelly is doing a good job."

There is limited visibility on Boeing ( BA ) deliveries this year

but it is too early to say whether more jets will have to be

pushed to 2026, he said. AerCap ( AER ) recently said it had been forced

to delay some Boeing ( BA ) and Airbus jets due to supply chain

problems.

Kelly was speaking as AerCap ( AER ) marks 50 years since the late

entrepreneur Tony Ryan brought the fledgling jet leasing

business to Ireland, which is now home to a global industry

which makes up half of the world's fleet of aircraft.

AerCap ( AER ) was born from the bad assets left when Ryan's

Guinness Peat Aviation collapsed, while the crown jewels were

scooped up by GE to create what became leasing giant GECAS.

Under Kelly, AerCap ( AER ) has expanded by buying the biggest

competitor to GECAS, Los Angeles-based ILFC, and finally GECAS

itself to bring the Irish leasing industry full circle under a

new dominant player.

OLDER JETS

Kelly, who is among a number of industry leaders predicting

tight supplies throughout the decade, said supply constraints

were "a little bit better in some aspects, but they'll be here

for years to come".

A switch to new fuel-saving jets has been slowed by scarce

parts, forcing carriers to fly older planes for longer. Kelly

said he saw no signs of a let-up in demand for older planes.

He downplayed any expectations that lessors could quickly

re-enter Russia in the event of a Ukraine ceasefire. Stressing

that he hoped for a peaceful outcome, he added: "Even if you

wanted to, I don't think the insurance market will go in there".

Lessors have clashed with Moscow and their own insurers over

jets confiscated in Russia after the invasion of Ukraine.

Perceived geopolitical risk is also a factor in China, where

AerCap ( AER ) and others have reduced their exposure, driven also by

growing competition for domestic business from local lessors.

"You have to be conscious of it for sure," Kelly said,

adding China would remain a significant part of AerCap ( AER ) activity.

(Additional reporting by Joanna Plucinska, Conor Humphries and

Padraic Halpin; Editing by Louise Heavens, Kirsten Donovan and

Alexander Smith)