Bank to dispose of non-core business AWAS after receiving ‘expressions of interest’ as aviation market recovers
Investment bank Morgan Stanley is selling its “non-core” aircraft leasing business AWAS as part of a drive to increase profitability and growth.
“Aircraft leasing is not a business that fits with our strategy,” says Morgan Stanley chairman and chief executive John Mack, adding: “Today, we believe that the marketplace offers the opportunity to execute a transaction in light of several other recent transactions and expressions of interest in our business.”
Analyst Chris Partridge of Deutsche Bank says “the turn in the market has generated specific interest in new equity sources for this sector. The industry has turned a corner and asset values and lease rates are on the up – private equity firms see it as a growth opportunity.” The trend is likely to continue as leasing represents a growing proportion of aircraft sales.
The move comes around a month after private equity firm Cerberus completed a buy-out of lessor Debis AirFinance, and two months after Aviation Capital Group completed its purchase of Boullioun Aviation.
Partridge says buyers could include North American, Middle Eastern and Asian private equity funds. Unsuccessful bidders for Debis AirFinance and Boullioun Aviation could bid for AWAS, Partridge says, although “with an ageing portfolio, it may not be as attractive as other lessors that have been on the market”.
Morgan Stanley says the sale process will start immediately.
|
Top 10 lessors by fleet value based on Avsoft and Avitas estimates - 2005 | |||||
|
Rank |
Leasing co |
Total fleet value |
Total fleet |
Avge value |
Managed fleet |
|
2005 (2004) |
|
$ ml change |
Units |
$ ml change |
$ ml change |
|
1 (1) |
ILFC |
28,395 9.9% |
824 |
34.5 -0.7% |
750 2.6% |
|
2 (2) |
GECAS |
23,617 10% |
1,276 |
18.5 6.1% |
1,187 5% |
|
3 (4) |
CIT Group |
5,145 7.3% |
297 |
17.3 1.9% |
56 1.1% |
|
4 (3) |
Boeing Capital |
4,836 -24.8% |
358 |
13.5 -5.7% |
82 1.7% |
|
5 (10) |
RBS Aviation Capital |
3,681 48.9% |
117 |
31.5 8.2% |
|
|
6 (6) |
Debis AirFrance |
3,392 7.4% |
267 |
12.7 2.2% |
320 9.4% |
|
7 (7) |
Boullioun Aviation |
3,139 2.9% |
123 |
25.5 -1.3% |
2 0.1% |
|
8 (5) |
GATX Capital |
3,101 -4.8% |
146 |
21.2 -8.1% |
73 2.3% |
|
9 (8) |
AWAS |
2,675 -6% |
170 |
15.7 -3.7% |
8 0.3% |
|
10 (11) |
|
2,594 5.3% |
64 |
40.5 -6.2% |
168 6.5% |
Notes: Figures based on fleet data from AvSoft’s ACAS database and values from Avitas taken at the current market rate for each year. Figures are taken in late November 2004, effectively representing a year-end picture
Source: Flight International
