Avolon to Focus on Integrating CIT, Consider M&A After 2017

  • HNA’s Avolon wants to become No. 1 airplane-leasing company
  • Asia outperforms on most metrics, Avolon CEO Slattery says

Avolon's Global Ambitions Take Flight

Avolon Holdings Ltd., the plane-leasing business of China’s acquisitive HNA Group, is focused on integrating CIT Group Inc.’s aircraft assets following the $10 billion takeover and will consider more purchases only after 2017, Chief Executive Officer Domhnal Slattery said.

The acquisition, announced last week, expands Avolon’s lineup to 910 aircraft including planes on order and propels it to third place among global aircraft lessors. This comes less than a year after Avolon entered the ranks of the top 10 when HNA’s Bohai Leasing Co. acquired it in a $7.6 billion purchase that closed in January.

“The primary focus now will be on the integration of the business when we close the deal in the first quarter next year,” Slattery said in a Bloomberg Television interview with Haidi Lun and Rishaad Salamat Thursday. “I think in terms of additional M&A, it will be beyond 2017.”

Avolon’s ambition is to become the No. 1 aircraft-leasing company, overtaking current market leaders GE Capital Aviation Services, a unit of General Electric Co., and AerCap Holdings NV, which have more than 1,000 aircraft each in operation. Dublin-based Avolon is betting on increased air travel particularly in Asia to spur leasing demand even as airlines’ profitability hits a plateau because of intense competition.

“Asia continues to outperform pretty much on every metric,” Slattery said. “With oil nudging upwards, we’ll see the profitability levels on a global basis definitely plateau and probably come off the peak.”

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