Netherlands-based lessor AerCap Holdings agreed to buy International Lease Finance Corp. (ILFC) from American International Group (AIG) for US$5 billion. AIG had agreed last year to sell ILFC to a group of investors from China for over $4 billion, but the Chinese group missed some payment deadlines, opening the door for AerCap. Under the terms of the agreement, AerCap will pay AIG $3 billion in cash, with the balance in stock. News of the deal, which is expected to close in the second quarter of 2014, sent AerCap shares up 39%, while AIG gained 2.7%
The chart below shows the world’s big lessors ranked by the value of their owned fleets at the end of 2012, using data from Flightglobal Insight. Prior to the sale, ILFC was the world’s second biggest commercial aircraft lessor by fleet size, with a 1,033-unit fleet, behind only GECAS, while AerCap’s 297-unit fleet was the fourth-largest As shown in the chart, the acquisition of ILFC’s fleet will give AerCap just under 1,400 aircraft, still well shy of GECAS’ 1,750.
In terms of value, however, the AerCap and GECAS owned fleets are roughly equal, at around $34 billion. The reason for this is that while the GECAS fleet includes almost 450 Regional Jets and turboprop aircraft, AerCap has just seven. AerCap has almost as many narrowbodies as GECAS, and 65% more widebodies. Also worth noting is that the GECAS and AerCap fleets are each valued at four times the value of the number three player, and each account for about 20% of the total value of the top 30.
And finally, in commenting on the deal, AerCap said the new entity has 385 aircraft on order (mainly through ILFC), including seventy-seven 787s, 29 A350s, and 155 A320neo.
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