Republic to be home to bulk of $41 billion assets in Aercap-ILFC deal

The bulk of the $41 billion in assets brought together by the merger of aviation finance player AerCap with its AIG-owned rival International Lease Finance Corporation (ILFC) will be located in the Republic after the deal goes through in April.

Irish- and Dutch-based aircraft leasing specialist AerCap is buying ILFC from US insurance giant AIG in a €4 billion cash and shares deal that its chief executive, Aengus Kelly, confirmed yesterday will be completed in three months.

The transaction will create an aviation leasing business with a fleet of more than 1,300 aircraft worth €41 billion. AerCap, whose key operations are in Shannon, has confirmed that it plans to move the majority of the ILFC assets that it is acquiring to the Republic. AerCap currently owns 370 craft, most of which are based here.

Increased share
The move will bring the Republic's share of the world's leased aircraft to 55 per cent from its current level of 40 per cent. Industry figures show that airlines have a combined fleet of 20,000 craft, about 8,000 of which are leased.

The collapse of a Chinese-led deal to buy ILFC, which had been on the block since 2009, paved the way for AerCap’s successful offer. Mr Kelly told the Global Airfinance Conference in Dublin yesterday that the company began work on its bid in December 2012 and approached AIG last September.

Credit watch
Ratings agency Standard & Poor's put AerCap and ILFC on credit watch after the deal was announced and predicted that it would lower the buyer's rating to BB+ from BBB once it goes through.

At the conference yesterday, Mr Kelly pointed out that AerCap was the first independent player in its business to get an investment grade rating. "We fully intend to get it back to investment grade," he told the BBC's Gavin Esler.

Also at the conference, Ryanair's chief financial officer revealed that the airline had completed a deal with Google under which it is providing details of the fares for its 1,600 routes to the internet company's flight search.