Companies’ moves on back of consolidation in the trillion-dollar industry

Chinese aircraft leasing firms are becoming game changers in the trillion-dollar industry as it consolidates on the back of growth in the global travel market.

In October, China-owned Avolon Holdings Limited agreed to buy the aircraft-leasing business of CIT Group for $10 billion in a deal that will create the world’s third-biggest rental fleet.

Avolon, a Dublin-based lessor, is wholly owned by China’s Bohai Capital Holding Co. It became a Bohai subsidiary through a $2.6 billion acquiring deal in 2015.

Meanwhile, Awas, another Ireland-based lessor that is owned by private equity firm Terra Firma, attracted the attention of Chinese bidders, including ICBC Leasing, Avic Capital and CK Hutchison Holdings, according to industry insiders quoted by the South China Morning Post.

“The aviation industry is entering a period of consolidation and if Chinese firms hope to further grow their size, then some players currently ranked between number five and 25 must be

...Some players currently ranked between number five and 25 must be willing to sell.” Peter Carroll, a Dublin-based partner at BDO

percent

proportion of leased aircraft in the global aircraft fleet in 1980

willing to sell,” said Peter Carroll, a Dublin-based partner at BDO, an accountancy and advisory company.

The sector, which specializes in purchasing aircraft that are then rented out to airlines, has become hugely popular in recent decades as airlines have struggled to maintain large enough in-house fleets to keep up with demand. The numbers of leased aircraft have grown steadily, from 2 percent of the global aircraft fleet in 1980 to about 40 percent in 2014.

Within this context, Chinese aviation leasing companies have expanded ambitiously, especially in Dublin, a city that manages more than 5,000