Boeing Co. won a leasing-firm order for 14 of its 737 Max jets, in another sign that airlines are expanding fleets in anticipation of a recovery in global aviation led by short-haul leisure demand.

The order would be worth $1.7 billion at list prices, though jets are usually sold at a steep discount. Aircraft lessor SMBC Aviation Capital will take delivery starting later this year and into 2022, Chief Executive Officer Peter Barrett said in an interview Tuesday. The planes are configured in a seating layout used for low-cost travel.

Domestic markets in the U.S., Mexico, and increasingly Europe are driving the recovery from the COVID-19 pandemic even as long haul travel lags, Barrett said. Most of SMBC’s customers that had asked for deferrals have begun paying again, and the lessor is seeing increased bids on single-aisle jets, he said.

“Different markets will obviously recover at different paces,” Barrett said. “While there’s always the risk of setbacks, we’re seeing a strong surge in countries with large domestic markets.”

Lessors including AerCap Holdings NV, Avolon Holdings Ltd, and SMBC canceled or delayed Max deliveries last year, but there are now signs the model is coming back into favor with the jet financiers, which have played a key role in the market for new aircraft since the pandemic.

Boeing shares traded up 0.8% in pre-market trading to $239.40 as of 6:34 a.m. in New York Tuesday.

Renewed Demand

Air Lease Corp. said earlier this month at its first-quarter earnings that it was looking to reactivate some Max deliveries that had previously been canceled because customers now want to take the aircraft, while Ryanair Holdings Plc CEO Michael O’Leary told a U.K. newspaper over the weekend that he wants to buy at least 100 Max 10 jets from 2026.

SMBC, the Dublin-based leasing unit of Japan’s Sumitomo Mitsui Financial Group, will now have a portfolio of 121 Max jets, according to a statement Tuesday from Chicago-based Boeing. In the first quarter of 2021, the lessor delivered 13 737-8s to customers, including 11 planes to Southwest Airlines Co. in the US and two to TUI AG in Europe.

The renewed demand for the model has helped Boeing outpace European rival Airbus SE for orders this year. Through the end of April, Boeing had 77 orders net of cancellations, compared with negative 35 for Airbus after a slew of cancellations from Norwegian Air Shuttle ASA.