DAE's portfolio expansion indicates strong growth and enhanced Boeing relationship.

Key Points:

  • An affiliate of Dubai Aerospace Enterprise (DAE) Ltd will acquire the rights, interests, and obligations of a portfolio of 64 Boeing 737 MAX aircraft from a subsidiary of China Aircraft Leasing Group Holdings Limited.

  • The 737 MAX airplane family stands out in terms of fuel efficiency, environmental performance, and passenger comfort, with the 737-10 being the largest model seating up to 230 passengers.

  • DAE CEO, Firoz Tarapore, emphasizes the positive growth trajectory and deepening relationship with Boeing and CFM International following this transaction.

DUBAI — Dubai Aerospace Enterprise (DAE) Ltd confirmed that an affiliated entity has reached a definitive agreement to procure a portfolio comprising 64 Boeing 737 MAX aircraft. This portfolio acquisition will be from a fully-owned subsidiary of China Aircraft Leasing Group Holdings Limited (“CALC”), encompassing the 737-8, 737-9, and 737-10 variants. The aircraft deliveries are slotted between 2023 and 2026, though specific transaction terms remain undisclosed.

Highlighting the 737 MAX airplane family's attributes, the series brings a combination of heightened efficiency, advanced environmental credentials, and augmented passenger amenities to the solo-aisle market segment. With power derived from CFM International LEAP-1B engines coupled with cutting-edge technology winglets, the 737 MAX models register a noteworthy 20% reduction in fuel consumption and emissions when juxtaposed with their predecessors. Among the family, the 737-10 takes precedence as the most spacious, accommodating up to 230 passengers and boasting a reach of 3,300 miles, making it adept at addressing 99% of single-aisle routes.

Providing insights on the acquisition, Firoz Tarapore, DAE’s Chief Executive Officer, expressed elation over the finalized transaction with CALC. He emphasized the acquisition's uniqueness, comprising entirely of new-gen, fuel-efficient aircraft. "This strategic move reinforces our growth trajectory. Factoring in this deal, our fleet – inclusive of owned, managed, committed, and those mandated for management – expands to roughly 550 aircraft with an estimated valuation of US$20 billion. Moreover, this acquisition also solidifies our ongoing collaboration with Boeing and CFM International. From our inception to date, DAE's commitment to Boeing aircraft stands at around 500 units. We're enthusiastic about nurturing this association even more in the forthcoming years," Tarapore remarked.

He also highlighted that a significant portion, about 20%, of the newly procured portfolio already caters to DAE's current airline clientele, thereby augmenting established relationships. The remaining assets from this acquisition are set for direct placement by DAE in the subsequent periods.

Conclusively, it's anticipated that this transaction will be fully sealed by the third quarter of 2023. Importantly, it's forecasted to remain neutral concerning the company's capital sufficiency, liquidity metrics, and funding ratios.