register here for GlobalData’s free bi-weekly Covid-19 report on the latest information your industry needs.
The International Air Transport Association (IATA) has reportedly expressed concern over the proposed deal between Irish company AerCap and GE Capital Aviation Services (GECAS).
The global airline industry body warned the deal would reduce competition in the aircraft market.
In an interview, IATA Director General Alexandre de Juniac told Reuters: “We understand that the situation for leasing companies is difficult.
“But combining the two to have a big player (in) a very dominant situation is not good news for us.”
Last week, AerCap confirmed that it is in talks with multinational conglomerate General Electric (GE) to acquire GECAS in a deal exceeding $30 billion.
The acquisition includes a $34 billion transfer of GECAS’ net assets, including Milestone engine leasing and helicopter leasing businesses to AerCap.
AerCap chief executive Aengus Kelly said the overall size of the rental market would leave room for “abundant competition”.
de Juniac was quoted by the news agency as saying, “It’s never good news to have a supply chain dominated by one player.
“We hope this will not mean an increase in leases, which represent a very high cost for airlines.”
The transaction is subject to AerCap shareholder approval, regulatory approvals and other conditions. It should be completed in 9 to 12 months.
GE is expected to divest several other assets, including its aviation lending business, once the deal closes.