Dubai Aerospace Enterprise (DAE) has agreed to buy 100% of Nordic Aviation Capital’s (NAC) shares, marking another step towards consolidation in the aircraft leasing sector.
Owning around 750 aircraft.
According to DAE, as of September 2024, NAC had 252 owned and committed assets on lease to about 60 airlines in 40 countries. The transaction terms were not disclosed.
DAE’s CEO, Firoz Tarapore, stated that the aircraft lessor was happy to have the opportunity to add NAC’s expertise, complementary market presence, and people to its platform.
DAE stated that the deal would be suitably capitalized and funded using internal resources and committed borrowed funding. As a result, the lessor’s leverage and funding indicators will remain within the ranges associated with its credit ratings.
The transaction, which is still requiring regulatory and NAC shareholder approval, is expected to be finalized during the first six months of the year.
On the same day that DAE announced the transaction, NAC entered a lease deal with Rise Air, a carrier based in Saskatoon, Canada, for two ATR 72-600.
Acquiring portfolio
Throughout 2024, DAE reported several transactions in which the lessor acquired at least 33 aircraft from various counterparties.
The first was reported in August 2024, when the Dubai, United Arab Emirates (UAE)-based corporation stated that it purchased 23 airplanes from various counterparties for a total of approximately $1.1 billion.
DAE reported a portfolio of 91% narrowbody aircraft and 86% next-generation aircraft, including the Airbus A320neo and Boeing 737 Max. At the time, Tarapore stated that the transactions resulted in DAE greeting six new airline customers.
In October 2024, the aircraft lessor added another 10 aircraft for around $500 million, four of which were next-generation narrowbody aircraft leased to four airlines. In addition, the corporation announced the purchase and sale of ownership interests in 36 managed aircraft from existing investors to new investors.
Aircraft lessor consolidation
Several aircraft lessors have merged in recent years to form larger companies. For example, in August 2023, the Saudi Arabian Public Investment Fund (PIF) announced that AviLease, which aspires to be one of the world’s largest aircraft lessors, has purchased Standard Chartered’s aircraft leasing business for $3.6 billion.
In December 2022, SMBC Aviation Capital completed the acquisition of Goshawk Management, an aircraft lessor based in Ireland. The former company claimed the merger resulted in “the second largest global player by number of aircraft and the largest Japanese-owned aircraft lessor.”
In November 2021, AerCap acquired GE Capital Aviation Services (GECAS), General Electric’s (GE) aircraft leasing arm. As a result, AerCap’s portfolio now includes over 2,000 aircraft and 900 engines, as well as an order book of around 450 aircraft.