In a further move toward market consolidation in the aircraft leasing industry, Dubai Aerospace Enterprise (DAE) has inked a final deal to buy all of Nordic Aviation Capital’s (NAC) stock.
Owning around 750 aircraft
According to DAE, as of September 2024, NAC has 252 owned and committed assets on lease to around 60 airlines in over 40 countries, while the terms of the deal were not made public.
“On a pro forma basis, DAE Capital’s fleet will comprise of approximately 750 owned, managed and committed aircraft with a total value of approximately US$22 billion on lease to approximately 170 airline customers in approximately 70 countries.”
“The aircraft lessor is thrilled to have this opportunity to add NAC’s capabilities, complementary market presence, and people to its platform,” stated Firoz Tarapore, CEO of DAE.
“This transaction will allow us to provide more cost-effective solutions to a larger group of customers.”
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 portfolios
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.
“When consolidated, the aircraft portfolio has a weighted average age of 3.4 years, a weighted average lease term remaining of 8.8 years and is on lease to 13 airlines in 9 countries.”
DAE said that the portfolio was made up of 91% narrowbody aircraft and 86% next-generation aircraft, such as the Airbus A320neo or 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.
During 2024, DAE acquired 83 aircraft, sold 68, and negotiated 233 lease agreements, extensions, and revisions, including long-term 737 MAX leases with Turkish Airlines, Eastar Jet, and Hainan Airlines.
Aircraft lessors’ 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.
“The transaction will accelerate AviLease’s growth plans to become a top-10 global lessor by the end of the decade, in line with Vision 2030, the nation’s blueprint for economic reform.”
In December 2022, SMBC Aviation Capital completed the acquisition of Goshawk Management, an aircraft lessor based in Ireland. According to the former firm, 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.
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FAQ
Who is acquiring Nordic Aviation Capital?
Dubai Aerospace Enterprise (DAE) is acquiring Nordic Aviation Capital, one of the world’s largest regional aircraft lessors.
What is the significance of this acquisition?
This acquisition will enhance Dubai Aerospace Enterprise’s portfolio, making it one of the top global aircraft leasing companies, especially in the regional aircraft sector.
When is the acquisition expected to be completed?
The acquisition is expected to be finalized by mid-2025, pending regulatory approvals and other formalities.
What types of aircraft does Nordic Aviation Capital specialize in?
Nordic Aviation Capital specializes in leasing regional aircraft, including models from ATR, Embraer, and De Havilland.
How will this acquisition affect Nordic Aviation Capital’s existing customers?
DAE has stated that it plans to continue supporting Nordic Aviation Capital’s existing customers while offering expanded leasing solutions under its management.
