Since being established last summer, the relatively new and Saudi Public Investment Fund-backed AviLease has grown extensively in the aircraft leasing sector. For its latest development, the rising global aircraft lessor has today entered into a definitive agreement to acquire the aircraft leasing business of Standard Chartered Bank, which includes Dublin-based Pembroke Group.

Climbing higher in the industry

Earlier this year, Standard Chartered earmarked its aviation business - known as Standard Chartered Aviation Finance, for sale and hired numerous advisors for a smooth process. While there were undoubtedly many interested, AviLease eventually came out on top and is preparing to purchase the aviation finance business for $3.6 billion, a slight increase from the initial expected deal of nearly $3.5 billion.

With this purchase agreement, AviLease and Standard Chartered Aviation Finance will be brought together as two strategically complementary businesses that will give the Saudi aircraft lessor scale, global diversification, and significant opportunities to leverage Standard Chartered's experienced team and operating capabilities. If anyone thought AviLease's growth within the year was already rapid, its expansion is about to accelerate further.

Photo: Markus Mainka | Shutterstock

Chief Executive Officer of AviLease, Edward O'Byrne, could not agree more as he highlights:

“This acquisition is a fantastic next step in AviLease’s young existence. The transaction accelerates our fleet's scale-up and lessee diversification, demonstrating our ability to execute our investment strategy. Equally important is the ability to combine forces and leverage the high-quality capabilities of the Standard Chartered platform. We are ambitious to become a top-10 global aircraft lessor, and this acquisition brings us one step closer.”

The acceleration comes as part of this massive acquisition, which will see AviLease obtaining a portfolio of 100 narrowbody aircraft and becoming a servicer for another 22 aircraft. The combined platform will own and manage a total of 167 fuel-efficient aircraft. Of the 167, 145 of the aircraft have an owned value at an estimated $6 billion and 22 of the managed aircraft are valued at around $800 million, all of which are leased out to 46 airlines worldwide.

Contributing to a growing ecosystem

Besides allowing AviLease to expand beyond measure, this new acquisition is also part of an ongoing push by the Kingdom of Saudi Arabia to become a thriving global trade, logistics, and tourism hub, as emphasized by AviLease Chairman, Fahah Al-Saif:

"This acquisition will propel AviLease and will in turn support Saudi Arabia’s aviation ecosystem on our path to help realize the Saudi Vision 2030’s objective of diversifying the economy and adding high-value employment opportunities for Saudi citizens.”

With the soon-to-be expanded aircraft portfolio and sped-up growth through the ranks of the aircraft leasing industry, AviLease seems to be on track to become the potential lessor of choice for more airlines outside Saudi Arabia as well. The company is even marketing Sustainable Aviation Fuel (SAF) contracts to its airline customer base worldwide, further increasing its competitiveness.

Photo: Riyadh Air

Concerning the transactions for this new purchase agreement, AviLease arranged an estimated $2.1 billion of competitive bridge financing commitments from four different banks, primarily Citibank North America, BNP Paribas, MUFG Bank, and HSBC Bank Middle East. This deal is expected to close before the end of this year, although no specific deadline has been set as yet.

Bottom line

The post-pandemic era has seen a tremendous jump in the number of aircraft lessors worldwide as new entrants pounce on the opportunity to meet airlines' demands for new fleet additions. While there were plenty of new entrants, such as Griffin Global Asset Management, SKY Leasing, and Sirius Aviation Capital, AviLease has shown the fastest and most significant growth - especially now that its portfolio will soon include over 150 aircraft from this acquisition.

What do you think about AviLease's aggressive expansion and future plans? Let us know in the comments.