© Reuters. FILE PHOTO: A General Electric aircraft used for testing jet engines is shown at Victorville Airport in Victorville, California
(Reuters) – The aircraft leasing industry is on the brink of its biggest shake-up in almost a decade as top two players AerCap and General Electric (NYSE:GE)’s GECAS discuss a deal to forge an industry titan with over 2,000 jets, financial sources said on Monday.
Negotiations for a tie-up follow years of speculation over the sale of GECAS and come as COVID-19 is expected to shift more of the world’s fleet into the arms of the leasing industry, which already holds around half of Airbus and Boeing (NYSE:BA) deliveries.
The Wall Street Journal, which first reported the possible deal, valued it at $30 billion and said an announcement
could come as early as Monday barring a last-minute hitch.
GE said the company does not comment on speculation, while AerCap did not respond to requests for comment.
In 2013, Ireland’s AerCap agreed to buy its largest rival, Los Angeles-based International Lease Finance Corp.
The structure of any deal to acquire GECAS was not immediately clear but several industry sources predicted it would include a similar stock structure that saw ILFC’s insurance owner AIG (NYSE:AIG) become a shareholder in the new AerCap.
Major leasing companies, which rent out airplanes for a monthly fee, are eyeing growth as airlines focus on repairing balance sheets wrecked by the drop in air travel during the pandemic.
DBS analysts said more airlines were expected to shift towards aircraft leasing as they emerge from the crisis.
But analysts cautioned any tie-up of the industry’s top two players, each of which is already around twice as big as third, Dublin-based Avolon, would face anti-trust scrutiny.Jet leasing in shake-up as AerCap, GE unit near deal1