Aircraft leasing taking off

Air Lease Corporation (ALC) has announced that a wholly-owned subsidiary of the company has entered into a joint venture with a co-investment vehicle arranged by Napier Park Global Capital for the purpose of investing in commercial aircraft and leasing them to airlines around the globe.

The newly formed entity is named Blackbird Capital I and is expected to acquire total aircraft assets of approximately $2 billion by year-end 2016. ALC will provide management services over a 12 year period to the joint venture for a servicing fee based upon aircraft assets under management.

In addition, the company expects to sell aircraft from its portfolio to the joint venture with an aggregate value of approximately $500 million by year-end 2016.

“We are excited to partner with Napier Park and its group of institutional investors because they share ALC’s vision of creating long-term value through leased aircraft assets,” said Steven F. Udvar-Hazy,ALC’s chairman and CEO. “Blackbird Capital I is an important partnership for ALC’s strategy to grow our management business and serves as a model that can be replicated in the future.”

Honeywell’s 23rd annual Business Aviation Forecast predicts sales and deliveries of as many as 9,450 new business jets worth $280 billion over the next 10 years. Deliveries of between 650 and 675 aircraft are projected in 2014, while prospects for 2015 are viewed as good as a result of several new model introductions and improvements in the global economy.

Survey respondents plan to make new jet purchases equivalent to about 23% of their fleets over the next five years, as either replacements or additions. North America continues to account for about 60% of projected aircraft demand, while the survey once again underlines the strong desire for larger-cabin aircraft with greater range and advanced avionics.