Dubai Aerospace Enterprise (DAE) will acquire the rights, interests and obligations of a portfolio of 64 Boeing 737 MAX aircraft from a wholly-owned subsidiary of China Aircraft Leasing Group Holdings Limited (CALC).
Delivery of the portfolio, which includes 737-8, 737-9 and 737-10 variants, will take place between 2023 and 2026. It will increase DAE’s fleet of aircraft to approximately 550 aircraft valued at $20bn, according to DAE’s CEO Firoz Tarapore.
“We are delighted to be able to conclude this transaction with CALC to acquire a unique portfolio of 100% new technology, fuel efficient single aisle aircraft,” he explained. “On a pro forma basis, this transaction will increase the percentage of new technology, fuel efficient aircraft in our owned fleet to approximately 66% from 50%.”
The Boeing 737 MAX aircraft are powered by CFM International LEAP-1B engines and advanced technology winglets, providing a 20% reduction in fuel use and emissions compared to the aircraft it replaces.
DAE will lease around 20% of the CALC acquired portfolio to existing clients, with the remainder being placed directly by DAE in the coming quarters, according to Tarapore.
“This transaction will also allow us to further deepen our existing relationship with Boeing and CFM International. Since inception and including this transaction, DAE has acquired and is committed to acquire approximately 500 Boeing aircraft. We look forward to growing this relationship even further in the coming years,” he added.
The transaction is expected to be completed in the third quarter of 2023 and is expected to have no impact on any of the company’s capital adequacy, liquidity, and funding ratios. DAE was advised by Milbank LLP and KPMG Ireland.
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