Jet-leasing mega-deal could herald consolidation wave in sector

AerCap Holding’ $30b deal to buy General Electric’s plane-leasing arm is spurring talk of further consolidation in the sector just as air travel is poised to begin a slow recovery from the Covid-19 crisis. The transaction could be followed by more mergers and acquisitions, according to analysts at JPMorgan Chase & Co. Cowen’s Helane Becker said its valuation should give investors comfort around book values, while a firm the size of the enlarged AerCap will be able to dictate jet design and purchase terms to manufacturers. Fly Leasing Ltd., led by former Aer Lingus chairman Colm Barrington, has been exploring a sale, according to people familiar with the matter. Hong Kong’s billionaire Cheng family has also gauged buyer interest in Goshawk Aviation over the past year, the people said. Another potential target is Avolon Holdings, whose owner HNA Group is still working to unwind an acquisition spree after being taken over by the Chinese government. The coronavirus pandemic has pushed airlines around the world to cancel jet orders, push back deliveries and defer rental payments. As middlemen, leasing firms have suffered themselves while also playing a critical financing role in keeping deliveries flowing, often with sale-leaseback deals that hand vital cash to carriers. The sector remains highly fragmented on a global basis, meaning more deals could take place without stirring antitrust concerns.<br/>