Orix buys 30pc stake in plane lessor from HNA

TOKYO: Orix Corp agreed to buy a stake in aircraft lessor Avolon Holdings Ltd from China’s HNA Group Co for US$2.21 billion (RM8.84 billion) in one of the Japanese financial firm’s largestever deals.

Through its aviation-leasing unit, Orix would get a 30 per cent stake in Avolon from HNA’s Bohai Capital Holding Co unit, the company said on Wednesday.

HNA is unwinding deals that have made it one of China’s most aggressive acquirers of foreign businesses.

While the lessors would continue to operate independently, Orix said it expected to tap Avolon’s ability to buy large numbers of aircraft direct from manufacturers.

Dublin-based Avolon is the world’s third-biggest plane-leasing company by fleet size and Orix is 12th largest, according to FlightGlobal.

The leasing sector is expanding with global aircraft demand set to double in the next 20 years, according to Boeing Co.

Asia has been leading the way, with other Japanese firms including Sumitomo Mitsui Financial Group Inc also looking to take advantage of the travel boom to expand their aviation arms.

Avolon chief executive officer Domhnal Slattery said the companies’ leasing portfolios were largely complementary, with his own firm a major buyer of new Boeing and Airbus SE jetliners whereas Orix specialises in managing older, mid-life planes.

He views the new 70:30 ownership split as a “stable long-term shareholding mix”, and that HNA still regards Avolon and the aviation industry as a core strategic focus.