Aviation Will See More M&A And Consolidation, Especially Aircraft Leasing

Aviation Will See More M&A And Consolidation, Especially Aircraft Leasing

American Airlines jets sit idly at their gates as a jet arrives at Sky Harbor International Airport ... [+] in Phoenix. While the aviation industry has suffered mightily from the Covid-19 pandemic, enthusiasm is growing among many players as vaccine rollouts continue to make progress across various markets. While underlying fundamentals of airlines are still weak, yesterday saw the announcement of the largest deal in the history of the aircraft leasing industry. Aercap is acquiring GECAS (GE Capital Aviation Services) from General Electric in a $30 billion transaction consisting of $24 billion in cash, $1 billion in notes and 46% equity in the Aercap entity. This combination of the No. 1 and No. 2 market leaders (depending on the metric used: total portfolio value or number of aircraft) will create a new No. 1 based on market share, portfolio value and number of aircraft. Along with the commercial aircraft portfolio and platform, Aercap is also acquiring the Milestone helicopter leasing company and engine leasing businesses of GECAS. The resultant company will have a bit more than 2, 000 aircraft out of roughly 12, 000 leased aircraft globally, or just less than 20% market share. Aercap's acquisition is a story of