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SMBC says tariffs could lead to production delays

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Says some caution over demand on 'transatlantic routes'

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Russia insurance settlement proceeds hit $1.4 billion

(Adds details, quotes in paragraph 2, 3, 5 and 8)

By Padraic Halpin and Tim Hepher

DUBLIN, May 22 (Reuters) - Boeing ( BA ) and Airbus

have made progress in boosting aircraft manufacturing,

but there is "a way to go" to get a stable, predictable

production cycle, the head of aircraft leasing giant SMBC

Aviation Capital said on Thursday.

The world's third-largest aircraft lessor, which has over

250 planes on order with both manufacturers, also said tariffs

could be a drag on that recovery and have the potential to delay

production increases.

Boeing ( BA ) has faced a series of crises but expects to stabilise

737 MAX production over the coming weeks, while Airbus has

reaffirmed its target for increased commercial deliveries this

year despite a recent dip.

"I was actually there (at Boeing ( BA )) a few weeks ago. I

certainly felt that the corner was turned and I don't say that

lightly. There's more to go but I do think they are absolutely

travelling in the right direction," Peter Barrett told Reuters,

adding that Airbus has also made progress.

As U.S. President Donald Trump's tariff war and "America

First" policies disrupt international relations, Barrett said

there was "some caution" on transatlantic routes, but that

SMBC's customers have said domestic U.S. demand was resilient.

SMBC on Thursday said it had booked a further $654 million

from insurance settlements over the last year related to jets

stranded in Russia following Western sanctions, bringing its

total recoveries from claims to $1.41 billion.

SMBC recorded an impairment of $1.6 billion in 2022 after 34

of its jets got stuck in Russia following the sanctions over

Moscow's war in Ukraine that forced the termination of leases.

SMBC was one of six lessors that ended an Irish lawsuit

against their insurers last month and Barrett said the majority

of its litigation around the world was complete.

Pretax profits at SMBC, owned by a consortium including

Japan's Sumitomo Corp ( SSUMF ) and Sumitomo Mitsui Financial

Group ( SMFG ), grew 22% year-on-year to $563 million in the

year to end-March, excluding the settlements, it said.