Dubai Airshow

Middle East Lessors Adding Aircraft to their Portfolios

 - November 16, 2019, 10:00 PM
Firoz Tarapore, CEO, Dubai Aerospace Enterprise.

UAE aircraft lessor DAE Capital has invested significantly in new-technology aircraft in the past two years, especially in the widebody Boeing 787-9 and Airbus A350-900. The company had 358 units on lease to 111 airlines in 56 countries as of September 30, its CEO Firoz Tarapore told AIN.

In addition to the approximately 300 aircraft it owns, DAE intends to manage another 100 for third parties. “DAE has received an investment mandate of $1.4 billion from a large international fund manager, which will allow us to significantly grow our portfolio of assets under management and brings our managed fleet to over half our stated targeted value of $5 billion in the next few years,” Tarapore said.

Speaking at the Airline Economics conference in Dubai in October, he said the company preferred acquiring rivals to signing major orders. In 2017, DAE acquired the AWAS group of companies, propelling its owned portfolio size to around 400 aircraft worth $14 billion. Over the past 18 months, DAE has raised over $3.5 billion in liquidity, leading to an investment-grade rating from Fitch and Kroll Bond Rating Agency.

“DAE believes the current environment, where there is strong investor demand for reliable current-generation aircraft, is the right time to manage its fleet exposure and take some returns through targeted and planned aircraft sales. Since January we have sold 23 aircraft [but] will continue to manage most of these aircraft. We are also actively adding aircraft to our portfolio, having purchased or committed to purchase 23 aircraft, including new-technology Boeing 787-9s and Airbus A350-900s.”

DAE’s fleet ranges from the 70-seat ATR 72-600 to the Boeing 787-9 and Airbus A350-900. “DAE has a clear line of sight to increase its managed portfolio to over $3.5 billion by year-end,” Tarapore said.

Meanwhile, Kuwait’s Aviation Lease and Finance Company (Alafco), claimed an “excellent performance” in 2019. “In 2020, we are well-positioned to continue our journey toward growth, especially through deliveries of new-technology aircraft, but we understand that we are facing some challenging global economic headwinds, likely to dampen demand,” CEO Adel Albanwan told AIN.

Alafco’s fleet list contains 64 aircraft: 29 Airbus A320-200s, 11 A320-200neos, two A321-200s, and two A350-900s, as well as 15 Boeing 737-800s and five 777-300ERs. It doubled its order book for the 737 Max at Dubai Airshow 2017, to 40 aircraft.

“We continue to monitor the 737 Max situation and are in discussion with Boeing on its recertification. As of now, there is no specific date on the deployment of the aircraft, but Alafco still has forty 737 Max aircraft on order.

“Presently, we have around 70 aircraft in our fleet, with an additional 100 aircraft on order from Airbus and Boeing. Our team has performed exceptionally to place these aircraft globally."