Prime Highlights
- KKR has committed $1.4 billion to expand its aircraft leasing business through its partnership with Altavair.
- The investment aims to capitalize on strong demand for leased aircraft amid ongoing supply constraints at Airbus and Boeing.
Key Facts
- Altavair acquires and leases commercial aircraft to passenger and cargo airlines worldwide.
- Since 2018, KKR and Altavair have acquired 188 aircraft and engine assets and served 67 airline and cargo customers globally.
Background
The private equity firm KKR has made a fresh investment in an amount of $1.4 billion for leasing aeroplanes via the partnership formed with Altavair. This has enabled the company to make an entry into the aviation industry since there is a shortage of aircraft due to production issues faced by the Airbus and Boeing companies. As a result, airlines are increasingly turning to leasing arrangements to meet fleet requirements while managing costs and preserving cash.
KKR said the new capital will be deployed over the next four years. The firm plans to acquire aircraft directly from airlines seeking to unlock capital, as well as from manufacturers and through secondary market transactions. Many of these deals involve purchasing aircraft and leasing them back to carriers under long-term agreements, allowing airlines to continue operations while improving liquidity.
Altavair specializes in acquiring and leasing both new and used commercial aircraft to passenger and cargo airlines around the world. The company has partnered with KKR on a range of aviation investments in recent years.
Airlines now lease nearly half of the global aircraft fleet, reflecting the growing importance of leasing companies and investment firms in aircraft financing. Since 2015, KKR has invested more than $12 billion in the aviation industry.
The firm said it will focus on long-term lease agreements with established passenger and cargo operators rather than distressed aviation assets. Since 2018, KKR and Altavair have acquired 188 aircraft and engine assets and leased them to 67 airline and cargo customers globally.
KKR believes the long-term nature of aircraft leases helps provide stable cash flows, reducing the impact of short-term challenges such as fuel price fluctuations and geopolitical uncertainty.