Merger a boost to aircraft leasing sector

The Government sees significant potential for further growth and job creation from the aircraft leasing industry.

Dublin’s reputation as a location hub for the sector was strengthened yesterday with the announcement that SMBC Aviation Capital — which is already headquartered here — is to expand, via merger, to become the third largest aircraft leasing firm in the world.

Most recently owned by Royal Bank of Scotland, the Irish-founded company was acquired by the Sumitomo Mitsui Banking Corporation (SMBC) for $7.3bn (€5.7bn) earlier this year.

Its new owners are now set — pending regulatory approval — to merge the company with two sister businesses, based in Amsterdam; SMFL Aircraft Capital Corporation and Sumisho Aircraft Asset Management. The enlarged entity will be globally headquartered in Dublin.

The move will boost SMBC’s fleet size by nearly 100 planes to 331 and its asset value by $2bn to $10bn. It will make the company the third largest of its kind; behind global leaders Shannon- based GE Capital Aviation Services and Los Angeles-head-quartered International Lease Finance Corporation.

Taoiseach Enda Kenny said this week’s official launches of SMBC Aviation Capital — in Tokyo and Dublin — represent “one of the largest ever transactions in Irish corporate history; creating one of the world’s largest aircraft leasing companies”.

“SMBC Aviation Capital will help Ireland to strengthen its position as a leading hub for this sector, and demonstrates the attractiveness of our legal, regulatory, and taxation regimes,” Mr Kenny said yesterday.

Meanwhile, SMBC Group said the deal should be taken as a sign of its strong commitment to the aircraft leasing business, with the likelihood of the company continuing to expand.

SMBC Aviation’s chief executive Peter Barrett called it “a very positive development”.

“The merger will add further scale, expertise, and product offerings to our already strong platform and is a significant step forward in terms of helping us to achieve our ambitious plans for the business,” he said.

We believe that there is likely to be further consolidation in the aircraft leasing industry in the future, and that this transaction will help position us to take advantage of that trend.”