Saturday 21 October 2017

AerCap's $5bn aircraft leasing deal is good news for Ireland

Sarah McCabe

Sarah McCabe

IRELAND will soon be home to the second largest leasing company in the world, following US-owned AerCap's purchase of ILFC from American International Group (AIG).

AerCap, which is headquartered in the Netherlands but effectively operates from Shannon, will control assets of $41bn (€30bn) when it takes over International Lease Finance Corporation.

The $5bn (€3.6bn) deal will triple its fleet to almost 1,400 planes, about 300 short of world leader GECAS -- itself a subsidiary of General Electric.

"We're creating the industry leader here," said AerCap's Irish chief executive Aengus Kelly, who was educated at UCD and trained as a chartered accountant with KPMG in Dublin.

In an investor presentation, AerCap cited Ireland's low corporation tax rate as one of the motivations behind the massive acquisition.

It said ILFC's assets would be reassigned to Ireland because the transfer of assets to Ireland would lower the combined company's tax rate.

ILFC is owned by AIG, the troubled US insurer that was saved from collapse by a 2008 bailout that reached $182bn. It has been seeking to get rid of non-core assets and narrow its focus as regulatory watchdogs increase their scrutiny of large financial firms.

It turned to AerCap after a group led by P3 Investments of Hong Kong failed to deliver the $4.2bn it had agreed to pay for an 80pc stake.

It is the latest in a spate of good news for Ireland's aircraft leasing industry, which now services half of all the world's commercial aircraft fleet.

Nine of the world's top 10 aircraft lessors have Irish operations.

Irish Independent

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