Avolon

$ 1,400 million, May 2010

Financial Services

Aircraft Leasing

Business
Avolon is a global aircraft leasing business, headquartered in Dublin and with offices in New York, Hong Kong and Shanghai. Cinven took a controlling interest in the company in May 2010, together with two other private equity firms. Each firm contributed US$250 million of equity capital as part of a US$1.4 billion equity and debt capital-raising exercise. Cinven and its partners hold 100% of the institutional equity in the business.

Avolon provides  aircraft leases and lease management services to airlines around the world, focusing on the acquisition of the latest generation of narrow-bodied, fuel-efficient aircraft – the kind that are most in demand in the resilient short-haul and economy markets. 

Avolon is led by one of the most experienced management teams in the sector. Dómhnal Slattery, formerly the founding CEO of RBS Aviation Capital, one of the largest aircraft lessors in the world, is Avolon’s Chief Executive. He leads a fast growing team of 20 aircraft leasing professionals that has a proven track record and a wide network of senior contacts in the airline, aircraft manufacturing and airline banking industries.

Strategy
Cinven believes that the demand and supply dynamics in the global aviation sector  present a clear market opportunity for Avolon: a global aircraft leasing business with the scale, resources and expertise to successfully compete with the world’s leading aircraft lessors. 

Approximately 30% of the global aircraft fleet – more than 6000 civil aircraft – are funded through leasing. Leasing has become an increasingly important source of finance in recent years as credit conditions have tightened: around 40% of all new aircraft deliveries are currently financed in this way. Capital-constrained established airlines and newer, emerging airlines experiencing rapid growth look to leasing to help them adapt to changing levels of demand. Narrow-bodied, fuel-efficient, low-maintenance aircraft are in demand because they help control operating costs and offer flexibility in the resilient short haul and economy travel markets.

At the same time, the withdrawal from the market of two of the world’s ‘big three’ aircraft leasing companies, as a result of the difficulties of their parent companies, has produced a shortage of capacity. Avolon, with its experienced management team and the backing of Cinven and its partners, is well-placed to take advantage of this window of opportunity.