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GE Weighs Helicopter Leasing as Plane Competition Rises

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General Electric Co. (GE)’s Capital Aviation Services has a fleet of more than 1,620 owned and serviced aircraft. The business focused on commercial airliners, regional jets and business jets before expanding about three years ago into leasing turboprop aircraft. Photographer: Simon Dawson/Bloomberg

Feb. 11 (Bloomberg) -- General Electric Co.’s aircraft leasing division, the world’s largest, may add helicopters to its portfolio of rental assets amid rising competition in the market for financing commercial jetliners.

“We’ve gotten into turboprops, regional jets, cargo planes,” Norm Liu, the unit’s chief executive officer, said in an interview yesterday ahead of the Singapore Airshow. “We have to look at new adjacencies -- we’re looking at helicopters.”

A potential move into helicopters, which are widely used in the oil and gas industry, could be interesting for GE Capital Aviation Services as new money from parties such as private-equity investors flows into aircraft leasing, Liu said. No final decision on helicopter leasing has been made, he said.

Gecas, as the leasing division is known, has a fleet of more than 1,620 owned and serviced aircraft. The business focused on commercial airliners, regional jets and business jets before expanding about three years ago into leasing turboprop aircraft.

Helicopter leasing could make sense with rentals at five-to seven-year terms, Liu said. He said Fairfield, Connecticut-based GE also would benefit because its engines are used in models from three of four major commercial-helicopter makers: United Technologies Corp.’s Sikorsky, Finmeccanica SpA’s AgustaWestland and Textron Inc.’s Bell. Airbus Group NV’s Super Puma also makes helicopters used in oil and gas exploration.

Leasing Expands

Recent entrants into aircraft leasing include Dublin-based Avolon, which was formed in May 2010 and whose owners include Cinven Ltd. and the Government of Singapore Investment Corp. In 2012, Sumitomo Mitsui Financial Group Inc. completed the $1.2 billion purchase of Royal Bank of Scotland Group Plc’s plane-leasing unit.

“The leasing market has evolved during the past decade from five equally competitive lessors to several times that many today,” Boeing Co. said in a December forecast on global jetliner financing.

Gecas may buy aircraft portfolios as other investors in the leasing industry opt to exit their stakes, Liu said. “You have to be very disciplined to buy,” he said.

Liu also said Gecas was looking at Boeing’s 777X, the upgraded variant of the twin-aisle jet due to enter service next decade. He said no decision was made on when Gecas might want to place an order, nor did he discuss the potential size of any order. The 777X will feature only GE engines.

To contact the reporter on this story: Andrea Rothman in Singapore at aerothman@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net; Benedikt Kammel at bkammel@bloomberg.net

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