Operating lessors: Prospects for the up-cycle December 2005
After three years of downturn, prospects are looking much better for the lessors, who are determined to make profits during the likely three or four years of the aviation up–cycle.
The upturn started in early 2004, off the back of two years of strong passenger growth in some key sectors — LCCs just about everywhere, Asian markets, Europe–Far East and East Europe. But it’s demand from Asia–Pacific airlines — both network carriers and LCCs — that is at the heart of the upturn for many lessors.
According to Frost & Sullivan, the Asia–Pacific aircraft leasing market was worth some $24bn in 2004, but this will rise to $33bn by 2008 — a compound annual growth rate of more than 8%. China in particular is becoming a vital market for the lessors, and it’s estimated that 30% of the Chinese fleet (more than 300 aircraft) is leased from outside of the country, with this proportion set to grow further.
India too is another growing Asian market, and its leased aircraft fleet has tripled in just two years, with GECAS, debis and SALE each believed to have more than $1bn worth of aircraft placed in India. However, if the Indian government goes ahead with a plan to end the tax exemption status for aircraft from April 2006, in effect this will increase lease rates for Indian airlines by up to 50%, so demand from India may slow next year.
But with tight supply of new aircraft (particularly of narrowbodies), growing demand for most aircraft types means that lessors are placing aircraft at rates not seen since before 2001 — and on longer–term contracts. This recovery in lease rates has been quicker than many in the industry forecast, although the bulk of contracts currently on the lessors' books were signed at a time when rates were lower, so the benefits of higher rates is filtering through only slowly into the lessors' financial results. Nevertheless, growing confidence within the industry is evidenced by the order book. After a handful of orders in 2004, the leasing companies have started to place larger contracts this year, and the top lessors (see table) now have 662 outstanding orders, compared to 601 as at 12 months ago. As usual, the "Big Two" — GECAS and ILFC — continue their grip on the industry, with a combined fleet of 2,455 aircraft and outstanding orders of 463 (compared with 2,251 aircraft and 468 orders as at a year ago).
However, troubles in the US industry have particularly hit the newer leasing companies that sprang up pre–September 11 in order to take advantage of what they thought was a relatively easy source of profit, combined with advantageous tax benefits. This included companies as diverse as white goods maker Whirlpool, entertainment giant Walt Disney and telephone company AT&T — the latter two of which have had to take around $100m worth of charges for exposure to carriers such as Delta and Northwest. Demand from US airlines for leased aircraft is still poor, and Babcock and Brown warns that "the liquidation of a major US legacy carrier under bankruptcy protection could temporarily depress lease rates and aircraft values as their fleets are reabsorbed by other airlines". There’s no doubt that lessors with aircraft placed with Delta and Northwest — which entered into Chapter 11 bankruptcy protection in September — are exposed, but the affected lessors are acting more aggressively with troubled US airline than they have done previously when rearranging existing lease deals.
Chris Partridge, Director at Deutsche Bank, says: "The Chapter 11 carriers are increasingly looking to reject older asset types and are additionally trying to convert some of their finance leases into operating leases. However, with supply so tight the lessors are playing hardball this time around, as they know the better quality aircraft at the troubled US airlines can be placed with clients elsewhere in the world, at higher rates." Fuel prices are the other major concern, in September this year AWAS said that "once again, the airline industry finds itself teetering on the edge. We believe that the situation, whilst currently just bearable, will begin to deteriorate materially in the face of further oil price increases." On the other hand, AWAS says that growing market uncertainty is leading to a rise in lease rates as airlines seek to increase their adjustable capacity, and this is now beginning to feed through to improved values for more liquid aircraft types.
Ownership changes As the leasing upturn continues the traditional merry–go–round in the ownership of lessors has started again, with parent companies that have been eager to offload their leasing subsidiaries since 2001 now being able to find a buyer. German bank WestLB had been trying to sell its aircraft leasing subsidiary Boullioun Aviation Services since mid- 2004, but eventually found a buyer (Aviation Capital Group) in the summer of 2005. In July, DaimlerChrysler and four German banks also used the upturn to dispose of their stakes in debis AirFinance (which they had previously tried to sell in 2001), with acquirer Cerberus Capital Management paying an unknown sum for the lessor and "all of its liabilities".
Following these transactions, in August this year Morgan Stanley said it would dispose of lessor subsidiary AWAS after receiving "expressions of interest" from certain companies and stating that the aircraft leasing business was no longer part of the investment bank’s core business. Morgan Stanley will have to book a loss of at least $1bn on the asset value of its fleet. Many new entrant financial companies see leasing companies as a simple directional play on the assets — i.e. they buy low and hope to sell high.
At the top of the list of potential buyers for AWAS will be private equity funds, particularly those who failed in bids for debis AirFinance and Boullioun, as the relatively old age of AWAS’s fleet may put off bids from other lessors. Nevertheless, the AWAS sale will indicate just how bullish the leasing industry really is. The Boullioun disposal took a year to complete, but Morgan Stanley will be hoping for a much speedier sale — depending, of course, on the price it is willing to accept (see AWAS section, below).
General Electric Capital Aviation Services (GECAS) GECAS, part of General Electric, has a fleet of more than 1,300 owned aircraft, placed with 200 airline customers in 60 countries, and manages another 300 aircraft for clients.
Over the last year GECAS has placed an increasing amount of new orders, bringing its outstanding order book to 153 aircraft, compared with 111 12 months' previously. Thanks to rising demand for narrowbodies, in June GECAS placed an order for 40 A320 family aircraft as well as 20 737NGs, the latter for delivery in 2006–2008 and worth $1.1bn at list prices. Also in June GECAS signed an LoI for 10 A350–800s, (convertible to larger A350- 900s) for delivery from 2010 onwards, although this has not been firmed up yet. In the same month GECAS placed an LoI for 20 Emb–190/195s, for delivery from 2006 onwards, which builds on an order placed i2000 for 50 Emb–170s.
This year GECAS has opened up a series of new offices around the world, including Mexico City, New Delhi, Sao Paulo and Shanghai — partly in order to take advantage of growing demand in these regions, and partly so that it lessens its reliance on the US market. A Moscow office was opened in 2004 and a Dubai office in 2003, and brings to 22 the number of GECAS offices worldwide. And with a presence in Beijing, Shanghai and Hong Kong, GECAS has been making a particularly big push into the Chinese market.
This year it signed contracts to lease four A320 family aircraft to United Eagle Airlines and three A320s to start–up Spring Air, bringing to 80 the total aircraft on lease with 12 different Chinese airlines.
International Lease Finance Corporation (ILFC) ILFC is a subsidiary of US insurance and financial services giant AIG, and has a portfolio of 735 owned aircraft, worth approximately $41bn. Traditionally ILFC has had the biggest order book of all the lessors, but although this is still the case, its outstanding orders have fallen from 357 as of 12 months ago to 310 at present, although this still commits the lessor to an investment of more than $22bn.
In October ILFC ordered 20 787–8s and 787–9s (with options for another four aircraft), worth $2.4bn at list prices, for delivery from 2010 onwards. The lessor had been considering its options for new medium widebodies to replace older models in its fleet for more than a year, with the 787 competing against the A350, but ILFC now seems to be hedging its bets as it followed up the 787 order with an order for 12 A350s in November. ILFC also has 10 A380s on order (five passenger and five freighter versions), with two of the former placed with Emirates. ILFC believes it will place the others with Asian airlines, and earlier this year held negotiations with Air China for at least two of the aircraft, which the Chinese carrier would like to put into service prior to the 2008 Beijing Olympics. In June ILFC also ordered 20 737–700/800s, six 777- 300ERs and two 777–200ERs, with the 737s being delivered from 2008 and the 777s in 2006–2008.
For 2004 ILFC reported a net profit of $502m, a 1% fall compared with 2003 despite a 10% rise in revenue to $3.3bn. However, in August this year ILFC admitted it needed to restate its historical results following a review by parent AIG that found a series of accounting discrepancies, including incorrect reporting of some lease revenue.
Although this restatement reduced ILFC’s net income by just $2.6m in the years to the end of 2004, shareholder equity had to be lowered substantially, and this was a major embarrassment to ILFC. In a filing with the US SEC the company stated that "AIG and its subsidiaries will make a capital contribution of approximately $400m by August 12 2005 to offset the reduction in our shareholders' equity resulting from the restatement." The incident followed the resignation of AIG CEO and chairman Maurice Greenberg earlier in 2005 and series of regulatory investigations.
In the first half of 2005, ILFC posted a net profit of $124m, 4% up on January–June 2004, and revenue of $893m, 15% up on 1H 2004 due to an increase in the owned fleet.ILFC’s lease margin rose slightly in the half–year, by 0.9% (to 19.1%), but the lessor says that "the strengthening of lease rates is starting to materialise in our results [although] some airlines continue to experience financial difficulties".
ILFC has been reducing its exposure to the US market, which is "under stress", and its proportion of revenue that comes from non–US customers has risen from 86% in 2002 to 90% in 2004. ILFC also has exposure to 11 aircraft placed with Varig, and relations between the two companies have deteriorated since the airline filed for bankruptcy in June 2005. ILFC claims that earlier this year the airline had committed to return all the aircraft and repay all its outstanding lease payments, but in September the Brazilian airline unveiled a new restructuring plan that extended the deadline for repaying debts — which possibly includes those owed to ILFC.
Boeing Capital Corporation (BCC) BCC has refocused to purely support its parent company’s aircraft sales, in effect becoming a "lender of last resort" to new aircraft customers that cannot otherwise finance their purchases (see Aviation Strategy, November 2004).
BCC is based in Renton, Washington, and also has offices in Sweden, Ireland, Belgium and Hong Kong. Although BCC includes a Space & Defence division, 95% of BCC’s assets are aircraft, which have a current value of $9.2bn. In its 10–Q filing for July–September 2005 BCC states that "while lease rates for aircraft are increasing, values for various aircraft types serving as collateral in BCC’s portfolio generally have not increased". And in its third quarter 2005 report Boeing Corporation noticeably says that "the industry’s aggregated financial health remains under the shadow of the US network carriers".
Since its refocussing, BCC is reticent about revealing just how many aircraft it has in its portfolio, but the number is believed to have been reduced to around the 500 mark (compared with more than 550 aircraft as of a year ago). However, of its $9.2bn worth of aircraft assets, 717s account for $2.5bn — which given that Boeing is halting production of the 717 in 2006 due to "lack of overall market demand" is a dangerous exposure. All BCC says on the matter is that "should the 717 aircraft suffer a decline in value and market acceptance, such impacts could result in a material adverse effect". The BCC portfolio is also believed to include a number of 757s and MD–11s, again models that have potential for significant falls in valuation.
To make matters worse, "a substantial portion of BCC’s portfolio is concentrated among US commercial airline customers". As at the end of September 2005, Chapter 11- protected United was BCC’s second largest customer by value, with some 20 aircraft worth $1.1bn (12% of BCC’s total portfolio by value).
BCC’s exposure to other Chapter 11 or financially troubled airlines includes ATA (where it had placed 12 757s, eight of which are being returned to BCC by early 2006), Varig (where BCC’s exposure is nine aircraft worth $323m), Delta ($112m of exposure), and Northwest ($484m). Significantly, in the 3Q 2005 period (July–September 2005), BCC recognised $32m of expenses due to "the deterioration in the credit worthiness of BCC’s airline customers, airline bankruptcy filings and the continued decline in the commercial aircraft asset values".
On the other hand, in the entire 1Q–3Q period BCC also reduced its provision for losses by $26m due to the emergence of Hawaiian from bankruptcy, although BCC also stated that this was partially offset by a decline in the value of the 717s leased to the airline.
Nevertheless, in the third quarter of 2005 BCC paid a $58m dividend to its parent, Boeing, and it has returned a total of $923m over the January 2004–September 2005 period. In the nine months to September 30 2005, BCC reported revenues of $728m, 1% down on the same period in 2004, and a pre–tax profit of $192m, compared with a $148m pretax profit in January–September 2004.
Entirely separate to BCC, in June 2005 Boeing created a new leasing and asset management group that is tasked with specifically targeted at drumming up more business with aircraft leasing companies, reportedly to include allowing customers to trade in Airbus aircraft as part of deals for new Boeing equipment.
CIT Aerospace US–based CIT Aerospace has a fleet of 325 aircraft, with an average age of six years and worth 5.8bn. 208 of these are commercial and 117 are regional aircraft, and they are leased to more than 120 airlines worldwide, with 85% of these outside the US.
A lessening of dependence on the US market was the rationale behind the announcement in August that the lessor was launching CIT Aerospace International, responsible for the European and Asian markets, and to be based in Dublin in order to take advantage of the generous Irish taxation regime for aircraft leasing. Currently 40% of CIT’s customers are based in Europe. 46 aircraft worth $1.5bn were transferred from CIT Aerospace to this new international division, and the aim is for this to at least triple by 2008, with the Dublin arm accounting for more than half of the entire CIT portfolio.
CIT targets 10% revenue growth each year, and although analysts speculate it may bid for AWAS, the lessor insists it will achieve its target by organic growth only. However, CIT’s lack of interest in AWAS may be more to do with the age of that lessor’s fleet, as CIT is trying to reduce the average age of its own portfolio. Jeff Peek, CIT Group CEO, says: "We like to have young aircraft and the average age of the AWAS fleet is almost double ours."
CIT’s fleet age is falling as in October the lessor began to sell a number of "older vintage, out–of–production aircraft". Additionally, 57 aircraft are on order. In August CIT ordered 24 A320 family aircraft and five A350s, with a list price of $2.2bn. The A320s will be delivered in 2007 and 2008, and the A350s in 2012 and 2013. CIT has options for further Airbus aircraft, and the lessor is also looking at acquiring aircraft in the 70–90 seat capacity market, with Embraer 170/190s believed to be among the leading contenders.
Along with the fleet–regeneration, CIT Aerospace is also taking over the remnants of the CIT Group’s corporate aircraft portfolio (worth around 0.5bn), following the July sale by the CIT Group of leases and loans worth almost 1bn on 380 corporate aircraft (business jets, turboprops and helicopters) to GE Commercial Finance.
Pegasus Aviation San Francisco–based Pegasus Aviation was launched in 1988 and traditionally focussed on older aircraft, but following an investment of $250m by Oaktree Capital Management and the raising of other finance, the lessor has changed strategy. Earlier this year it ordered six 737–800s, for delivery in 2006–2008, of which four have already been placed with Transaero. Further orders are likely with both Boeing and Airbus as Pegasus further expands its portfolio, which currently stands at 250 aircraft worth $4.6bn. After acquiring younger aircraft valued at £2.5bn over the last two years, the average age of its fleet now stands at just over four years.
Although it has no offices outside of the US, up to a fifth of Pegasus’s fleet is with Asia–Pacific clients (it has more than 20 aircraft in China alone), which Pegasus says makes it among the top four lessors in the region. AerCap AerCap was previously called debis AirFinance until the lessor was bought from DaimlerChrysler and a consortium of four German banks by New York–based Cerberus Capital Management in July this year for an undisclosed sum. Cerberus also owns 9.2% of Air Canada, acquired in 2004 when the carrier was reorganised.
Schiphol–based AerCap has offices in Ireland and the US, and has a fleet of 238 aircraft, currently placed with 85 clients in 46 countries. At acquisition debis owned 126 aircraft, with another 107 aircraft managed for third parties.
Following the change of owner, AerCap is believed to be analysing the doubling of its fleet within the next two years. 10 A319s, eight A320s and four A321s are currently on order, and in late November Airbus announced that AerCap had signed an LoI to buy 70 A320 aircraft. Negotiations for new orders are believed to be taking place with Boeing, and the lessor is also interested in acquiring used aircraft from other companies.
The lessor is looking for a "diversified portfolio" (the current fleet includes MD–80s, Dornier 328s and F100s) although the A320 family and 737NGs are likely to be the focus for orders over the next year. Prior to the change of ownership, in June debis agreed a deal to sell to Avianca the 10 Fokker 50s that it was leasing to the Colombian airline.
GATX Air GATX Air own 160 aircraft, all of which were placed with approximately 60 customers as at the end of 3Q 2005. The San Franciscobased lessor also manages 60 aircraft for third parties, and has offices in the US, Japan, Singapore France and the UK. However, GATX Air says that although "lease rates on certain aircraft types continue to recover as highlighted by the recent concurrent bankruptcy filings by two major US carriers and continued high jet fuel prices, the air market remains volatile".
No aircraft are scheduled for delivery this year, and it has just four outstanding orders, for A320s (although two of these were placed in September this year). In the first three–quarters of 2005 GATX Air achieved a net profit of $10.1m, compared with $9.6m in the same period of 2004. For the whole of 2004 GATX Air reported a net profit of $10m, compared with $2m in 2003. And in April GATX Air partnered with German bank NSH Nordbank to launch an aircraft investment company called Alster & Thames Partners.
Aviation Capital Group A year ago California–based ACG owned or managed 100 aircraft, but in June it bought Seattle–based Boullioun Aviation Services from WestLB for a reported 2.7bn. The acquisition added more than 120 aircraft (and orders for 11 Airbus aircraft) to ACG’s portfolio, which now comprises 220 aircraft and has a value of more than $5bn. ACG claims this makes it one of the top five global lessors, although our table (below) shows it is in equal seventh place according to fleet size.
In 2004 ACG recorded revenue of 137m, 33% up on 2003, but this will rise considerably in 2005 following the Boullioun acquisition. ACG — a subsidiary of US insurance giant Pacific LifeCorp — also has offices in the UK and Chile, and it is making a push into the Chinese market through a new Beijing office.
Already ACG has 19 aircraft on contract with Chinese airlines, which compares with 24 aircraft placed with US carriers.
RBS Aviation Capital RBS Aviation Capital was launched by the Royal Bank of Scotland in 2001, but is undergoing a major expansion aimed at turning it into one of the industry’s top lessors. It owns 161 aircraft, placed with more than 100 customers worldwide. These comprise 37 A319s, 20 A320s, three A321s, two A330s, 78 737s, one 777, four CRJs, four Dash 8- 300s and 12 ERJ–145s. RBS has increased its fleet by more than 40% in just a year, and its portfolio will increase further following orders placed in July for 20 737–800s, five A319s and 15 A320s, all for delivery between 2006 and 2008.
The RBS fleet has an average age of three years, which the company claims is the youngest of any fleet lessor. RBS is headquartered in Dublin and has offices in the UK, Hong Kong, China and the US.
AWAS Seattle–based AWAS has 114 employees and offices in the US, the UK, Singapore and Australia. Its fleet of 155 aircraft are currently placed with 76 customers around the globe. However, a year ago AWAS had 176 aircraft on its books, but this has reduced by 12% in just a year. The bulk of this reduction in portfolio came in January 2005 after AWAS sold 12 737–300s, four MD–83s and two FokkerF27s to undisclosed buyers. The aircraft had an average age of 17 years and were indicative of AWAS’s fleet, which even after this disposal has an average age of around 10 or 11 years, and still greater than most of its competitors.
The portfolio currently comprises 10 A300s, nine A320s, two A321s, one A330, one A340, 39 737–300s, eight 737–400s, 12 737–500s, four 737–700s, 20 757s, 26 767s, two 747s, one 777, 17 MD–80s and three Fokker 70s.
Morgan Stanley bought AWAS (then called Ansett Worldwide Aviation Services) in 2000 from the TNT Post Group and New Corporation, but its performance since then is unclear. The bank says it will write down the value of AWAS and make an "after tax non–cash accounting charge" of $1bn in the third quarter of 2005 in preparation for its sale, although the relatively old fleet may be inhibit interest from the larger lessors, which have younger portfolios. AWAS is more likely to attract interest from private equity players, although despite the write–down, in order to secure a sale Morgan Stanley may yet have to drop the $2.6bn price tag it currently values the portfolio at.
Pembroke Pembroke is owned 50% by GATX Capital and 50% by Rolls–Royce and currently owns a fleet of 27 aircraft, with another 114 managed on behalf of clients (compared with 29 owned and 119 managed a year earlier).
It is a narrowbody specialist, with 737s and A320 family aircraft making up two–thirds of its total portfolio. Launched in 1993, Dublin–based Pembroke has around 30 customers around the world.
Babcock & Brown Babcock and Brown operates a portfolio of 144 aircraft, with an average age of just under eight years and with a total value of worth US$3.8bn. The majority of the fleet are narrowbodies, which "have a more liquid market as compared to wider bodied aircraft". As at 30 June 2005 Babcock’s fleet was 98% utilised, with aircraft on lease to 52 airlines. Babcock & Brown listed on the Australian Stock Exchange in late 2004, and according to its annual report for last year the aircraft leasing business was "a major contributor to the operating lease group result".
ORIX Aviation Dublin–based ORIX Aviation is owned by a Japanese financial company and has a fleet of 80 aircraft (compared with 68 a year ago), which with engines is worth more than $3bn.
ORIX specialises in narrowbody aircraft, which it says are "relatively versatile and easy to lease". The portfolio comprises 46 A320 family aircraft, two A330s, five A340s, 15 737s, two 747s, two 767s, one 777 and seven ATR72s.
Singapore Aircraft Leasing Enterprise (SALE SALE is an Asian leasing specialist based in Singapore, although it also has offices in the UK and US. It currently has a portfolio of 59 owned aircraft (with another eight managed for clients), with assets totalling more than US$2.6bn.
A year ago SALE had 14 aircraft on order — all from Airbus — but in the last 12 months it has doubled its order book as the leasing market has picked up. In May SALE placed a firm order for 20 737–800s, although these are convertible to 737–700 or 737–900X variants. The first aircraft will arrive in the fourth quarter of 2006, with deliveries due to be completed by 2009, and 20 further aircraft are on option. According to Robert Martin, CEO of SALE, the order was placed as a "logical diversification of the SALE portfolio", which currently comprises 42 Airbus aircraft and 17 Boeing aircraft. It owns just 10 737s at present, most of which were acquired through sale and leaseback deals with airlines. In particular the 737s will enable SALE to offer a better choice of narrowbodies to the raft of LCCs launching or planning to launch in Asia.
The company also has outstanding orders for eight A320s, all of which will be delivered by the end of the second quarter of 2006.Earlier this year SALE considered ordering Embraer 190 regional jets, but reportedly decided against this after not being able to get the discount it wanted.
In order to pay the deposits required for the Boeing order, in the summer SALE issued US$47m worth of bonds in the Singapore market, the latest of approximately US$4bn of funding the company has raised since it was founded in 1993. SALE is currently owned by Singapore Airlines (35.5%), WestLB (35.5%), Temasek Holdings (14.5%) and by the Government of Singapore Investment Corporation (14.5%) — and although WestLB sold Boullioun this year, claiming it was not part of core operations, its holding in SALE is believed to be more longer–term.
Guggenheim Aviation Partners (GAP) GAP was launched by US–based Guggenheim Capital in 2003 with just $50m, but has quickly built up a fleet of 20 aircraft, 15 of which are 747–400s. Its portfolio is placed with customers, other than two 747- 400 Combis, which are scheduled to be converted to Boeing Converted Freighters (BCFs).
GAP has ordered 17 aircraft over the last year. In July Guggenheim ordered six 747- 400ER freighters, at a list price of $1.4bn and for delivery in 2006 to 2008. Four of these have been contracted to Martinair, for delivery from 2007, and the other two are going to Iceland–based Bluebird Cargo. This order followed the purchase of five 747–400s in.
October 2004 for conversion into BCFs. And this October GAP bought six 737–400s, three 757s and a 767–300 from an undisclosed seller, and all but one of these aircraft (a 757) had been placed with airlines within a few weeks.
Oasis After reporting pre–tax profits of $3m in 2004 (double those in 2003 but based on a 12% drop in revenue), Abu Dhabi–based Oasis International Leasing has been raising further funding this year in order to finance an expansion of its regional leasing business. In July it added $220m to the $190m it had already raised since it was launched in 1997 by the Abu Dhabi investment company, BAe and the Gulf Investment Corporation.
Oasis has a portfolio of 20 aircraft — one A319, six A320s, one A321, four 737s, two 777s, two CRJ–100s and four Emb–120s — that are placed largely with Middle Eastern or North American customers. The latest fundraising is being used to fund Oasis’s largest ever contract: a $1bn deal for eight A330- 200s for delivery to Middle Eastern airline Etihad Airways in 2006–2007.
Other lessors Other lessors include Munich–based Bavaria International Aircraft Leasing — originally started as a charter airline back in 1958 and currently owned by German corporate group Schorghuber. Bavaria currently operates a fleet of 30 aircraft (although four are currently unplaced), all of which are A320s, 737s or 717s. In January 2005 Bavaria ordered six 737–700s worth around $330m at list prices, with six further aircraft on option. The aircraft will be delivered by 2007.
US–based Q Aviation has a fleet of 54 aircraft and opened an office in Singapore this year, while Dublin–based Aergo Capital has a fleet of 36 aircraft, all of which are older model 737s or MD–82s. BCI Aircraft Leasing has a fleet of 78 aircraft, most of which are old generation 737s, while at the Dubai Air Show in November Airbus announced an order worth $2.9bn for 12 A350s, plus six options, from Kuwait–based lessor Alafco, which specialises in Sharia–based leasing and currently has a portfolio of 11 aircraft.
Sunrock Aircraft Corporation, a subsidiary of Nissho Iwai Corporation, has a fleet of 18 exclusively Boeing aircraft and has two 737s on order, while Hong–Kong–based new entrant LCAL (Low–Cost Aircraft Leasing) placed an order for six 787–8s at the Dubai air show in November.
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