Aercap, GECAS And The Aftermarket

The GECAS-Aercap merger will be the largest in aviation history once finalized and will have an influence on the commercial aftermarket.
Credit: Boeing

The $30 billion merger of lessor leaders Aercap and GECAS will be the biggest in aviation history, creating a combined entity that owns or manages more than 2,000 aircraft and 900 engines.

It will also create a business with unprecedented purchasing power and a strong link to a top-tier OEM via the 46% share that General Electric will retain in the merged business. 

Furthermore, it will wield huge power in the engine leasing business by combining an unmatched number of airline relationship with a spare engine portfolio focused on the market-leading CFM56 and LEAP narrowbody engines. In 2019, about three-quarters of GECAS’ engine and aircraft leasing customers overlapped. 

Aercap chief executive Aengus Kelly recognised this on a recent investor call, noting that beyond the 900 or so engines in GECAS’ and its joint venture SES’ portfolios, the acquisition “adds more than this in terms of relationships, expertise and product offering”.

Other advantages will include the use of spare engines to minimize downtime between aircraft leases, or to maximize green time for ageing aircraft and engines.

On the aircraft side, Aercap plans to make new technology aircraft 75% of the merged business’s portfolio by 2024. At present, the equivalent figure for Aercap alone is about 55%.

Furthermore, Aercap aims to push the share of narrowbody aircraft in the combined portfolio to 66% of book value from 59% at present.

This means that Aercap will seek to sell significant numbers of widebody aircraft over the next three years.

Under the terms of the purchase agreement, which still requires regulatory approval, GECAS will receive 111.5 million newly issued Aercap shares, $24 billion of cash and $1 billion of Aercap notes and/or cash.

The combined company will retain the name Aercap,w ith the deal expected to close in late 2021 or the first quarter of 2022.

Alex Derber

Alex Derber is a UK-based aviation journalist and editor of the Engine Yearbook. He contributes regular features, news and opinion pieces about the…