International Lease Finance Corp (ILFC) is a big name, in fact the biggest name in airliner leasing globally and it is on the block to be sold.
ILFC is owned by American International Group (AIG) and they are looking to sell a 90% stake in the company to New China Trust Co Ltd, New China Life Insurance Co Ltd, P3 Investments Ltd and China Aviation Industrial Fund. AIG needs the money from the sale, as they owe $182 billion to the US government for its bailout of AIG in 2008. It sounds like a motivated sale.
ILFC may be the biggest, but the fleet of aircraft they own is not the newest, in fact Richard Aboulafia of the Teal Group referred to the new owners as becoming "a curator of an old jet museum."
So what gives? Could this consortium just be looking to coast on ILFC's reputation in the airline industry? Somehow I doubt it. Chinese business is always on the move and I suspect they will want to modernize the leasing fleet and the company itself. I have a feeling they are thinking of Chinese airline expansion, too.
This is not a small Chinese purchase, like Epic Aircraft or even Cirrus was. This purchase could be a global game changer in the world airliner business, depending how it plays out.
Once again Chinese investors show that they not only have the money, but also the verve to go big and buy what no one else seems to want to risk. As time goes by the aerospace world is looking increasingly Chinese these days!
Here is how the foreign ownership list now looks:
- Cirrus Aircraft - Government of the Peoples Republic of China
- Continental Engines - Government of the Peoples Republic of China
- Diamond Aircraft - majority owned by Medrar Financial Group, Dubai
- Epic Aircraft - Engineering LLC, Russia
- Glasair Aircraft - Jilin Hanxing Group, China
- International Lease Finance Corp - 90% New China Trust Co Ltd, New China Life Insurance Co Ltd, P3 Investments Ltd and China Aviation Industrial Fund
- Liberty Aerospace - 75% owned by the Kuwait Finance House, a wholly owned subsidiary of Kuwait Finance House of Bahrain
- Piper Aircraft - Government of Brunei
- Superior Air Parts - Weifang Tianxiang Technology Group, China
So who will be next?
Rus Niles interviews Richard Aboulafia on AVweb about this buyout. Aboulafia is notably skeptical.
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