GECAS (GE Capital Aviation Services) was an Irish–American commercial aviation financing and leasing company.
AerCap
AerCap Holdings N.V. is an Irish aircraft leasing company based in Dublin. It became the largest aircraft leasing company in the world after acquiring International Lease Finance Corporation (ILFC) in 2014, then GECAS from General Electric in ...
acquired the company from
GE Capital
GE Capital is the financial services division of General Electric.
The company currently only runs one division, GE Energy Financial Services. It had provided additional services in the past; however, those units were sold between 2013 and 2018 ...
on November 1, 2021.
GECAS was the largest commercial airline leasing/financing company in the world by number of aircraft.
The company offered many aviation finance services, including aircraft leasing, aircraft lending, engine leasing, asset management, and aircraft consulting. In terms of aircraft leasing, GECAS purchased aircraft from manufacturers such as
Airbus
Airbus SE (; ; ; ) is a European Multinational corporation, multinational aerospace corporation. Airbus designs, manufactures and sells civil and military aerospace manufacturer, aerospace products worldwide and manufactures aircraft througho ...
and
Boeing
The Boeing Company () is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. The company also provides leasing and product ...
, and then leased them to airlines, typically for about eight years, and usually on
dry lease
Aircraft leases are leases used by airlines and other aircraft operators. Airlines lease aircraft from other airlines or leasing companies for two main reasons: to operate aircraft without the financial burden of buying them, and to provide tempora ...
contracts. GECAS also offered purchase leasebacks. The company had two global headquarters in
Shannon, Ireland
Shannon () or Shannon Town (), named after the river near which it stands, is a town in County Clare, Ireland. It was given town status on 1 January 1982. The town is located just off the N19 road, a spur of the N18/M18 road between Limeric ...
, and
Norwalk, Connecticut
, image_map = Fairfield County Connecticut incorporated and unincorporated areas Norwalk highlighted.svg
, mapsize = 230px
, map_caption = Location in Fairfield County, Connecticut, Fairfield County and ...
. The company had over 575 employees and 26 offices throughout the world.
GECAS had a fleet of over 1,970 aircraft, operated by 270 clients in over 75 countries.
GECAS' primary competitor was AerCap, with other competitors including
Air Lease Corporation
Air Lease Corporation (ALC) is an American aircraft leasing company founded in 2010 and headed by Steven F. Udvar-Házy. Air Lease purchases new commercial aircraft through direct orders from Boeing, Airbus, Embraer and ATR, and leases them to it ...
,
Aviation Capital Group
Pacific Life Insurance Company is an American insurance company providing life insurance products, annuities, and mutual funds, and offers a variety of investment products and services to individuals, businesses, and pension plans.
History
Paci ...
,
BBAM
BBAM LLC is an aircraft lease company based in San Francisco, United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It co ...
and
SMBC Aviation Capital
SMBC Aviation Capital, formerly RBS Aviation Capital, is one of the world's largest aircraft leasing companies. It is owned by a consortium of leading Japanese institutions: Sumitomo Mitsui Banking Corporation (SMBC), Sumitomo Mitsui Finance a ...
.
GE Aviation, another GE subsidiary, was part of the
CFM International
CFM International is a 50/50 Franco-American joint venture between GE Aviation and Safran Aircraft Engines (formerly known as Snecma). It was formed to build and support the CFM56 series of turbofan engines. The company is the world’s leading s ...
joint venture with
Safran
Safran S.A. is a French multinational company that designs, develops and manufactures aircraft engines, rocket engines as well as various aerospace and defense-related equipment or their components. It was formed by a merger between SNECMA and ...
. Previously, GECAS had a policy of exclusively selecting GE engines for 99% of its airliners, and had only eight
Boeing 757
The Boeing 757 is an American narrow-body airliner designed and built by Boeing Commercial Airplanes.
The then-named 7N7, a twinjet successor for the 727 (a trijet), received its first orders in August 1978.
The prototype completed its mai ...
s with
Pratt & Whitney
Pratt & Whitney is an American aerospace manufacturer with global service operations. It is a subsidiary of Raytheon Technologies. Pratt & Whitney's aircraft engines are widely used in both civil aviation (especially airlines) and military aviat ...
or
Rolls-Royce
Rolls-Royce (always hyphenated) may refer to:
* Rolls-Royce Limited, a British manufacturer of cars and later aero engines, founded in 1906, now defunct
Automobiles
* Rolls-Royce Motor Cars, the current car manufacturing company incorporated in ...
turbofans. As the
Airbus A350 XWB
The Airbus A350 is a flight length, long-range, wide-body aircraft, wide-body twinjet, twin-engine jet airliner developed and produced by Airbus Commercial Aircraft, Airbus.
The first A350 design proposed by Airbus in 2004, in response to ...
did not select GE engines, GECAS would not order it without airline placement. However, the company finally leased the first A350 operated by
Qatar Airways
Qatar Airways Company Q.C.S.C. ( ar, القطرية, ''al-Qaṭariya''), operating as Qatar Airways, is the state-owned flag carrier airline of Qatar. Headquartered in the Qatar Airways Tower in Doha, the airline operates a hub-and-spoke netw ...
to diversify assets and reduce risk. GECAS also leases the Pratt & Whitney-powered
Bombardier Q400 and
ATR 72
The ATR 72 is a twin-engine turboprop, short-haul regional airliner developed and produced in France and Italy by aircraft manufacturer ATR (french: Avions de transport régional or it, Aerei da Trasporto Regionale), a joint venture formed b ...
. GE/CFM supports Pratt & Whitney, Rolls-Royce and
IAE engines.
History
In 1967, GE Credit Corporation (GECC), now
GE Capital
GE Capital is the financial services division of General Electric.
The company currently only runs one division, GE Energy Financial Services. It had provided additional services in the past; however, those units were sold between 2013 and 2018 ...
, signed its first aviation lease with
Allegheny Airlines
Allegheny Airlines was a regional airline that operated out of Pittsburgh, Pennsylvania, from 1952 to 1979 with routes primarily located in the eastern U.S. It was the forerunner of USAir that was subsequently renamed US Airways, which itself me ...
. The deal leased three
McDonnell Douglas DC-9
The McDonnell Douglas DC-9 is an American five-abreast single-aisle aircraft designed by the Douglas Aircraft Company. It was initially produced by the developer company as the Douglas DC-9 until August 1967 and then by McDonnell Douglas.
After ...
s to the Pittsburgh-based operator. In 1981, GECC's Transportation & Industrial platform began to co-invest with UK lenders on aircraft leases. Two years later, GECC completed its first non-US lease to
Swissair
Swissair AG/ S.A. (German: Schweizerische Luftverkehr-AG; French: S.A. Suisse pour la Navigation Aérienne) was the national airline of Switzerland between its founding in 1931 and bankruptcy in 2002.
It was formed from a merger between Bal ...
. GECC purchased the California-based Polaris Aircraft Leasing Corporation in 1986. With the purchase of Chemical Bank in 1989, GECC would begin to crucially expand its global presence.
GECAS was officially formed in 1993 to manage the assets bought from the Irish-based
Guinness Peat Aviation
Guinness Peat Aviation (GPA) was a Commercial Aircraft Sales and Leasing company set up in 1975 by Aer Lingus, the Guinness Peat Group (a London-based financial services company) and Tony Ryan, then an Aer Lingus executive.
History
GPA was ...
, GECC Transportation & Industrial's Aviation Group, and Polaris Aircraft Leasing. By 1996, the company owned the world's largest leased fleet, and place its first speculative OEM order. In 1999, GECAS added engine leasing to its service offerings.
In 2000, GECAS acquired PK AirFinance to offer aircraft lending. The same year, the company also moved into the regional jet and widebody space with its first order for
Boeing 777
The Boeing 777, commonly referred to as the Triple Seven, is an American long-range wide-body airliner developed and manufactured by Boeing Commercial Airplanes. It is the world's largest twinjet.
The 777 was designed to bridge the gap bet ...
s. In 2002, the company began freighter conversions to further maximize the life of its narrowbody assets.
The acquisition of The Memphis Group in 2006 added airframe parts to GECAS'service portfolio. GECAS also owns a minority stake in
Oxford Aviation Academy
CAE Oxford, part of CAE Inc., is an ab initio flight training network. It provides integrated aviation training and resourcing services. Professional airline pilots have been trained at the Oxford Aviation Academy flight school since 1961.
...
retained when it sold 80% (before dilution) of GECAT to Star Capital Partners in 2007.
In 2010, GECAS acquired AviaSolutions, offering aviation consulting as part of the company's services. In 2015, GECAS took over the Irish-based
Milestone Aviation Group
Milestone Aviation Group, a subsidiary of AerCap, is an aircraft leasing company focused on helicopters. As of December 31, 2021, it owned 355 helicopters, which are leased to companies including CHC Helicopter, Bristow Helicopters, Saudi Aramc ...
to add helicopters and rotary aircraft to its leasing portfolio.
In 2016, GECAS was ranked as "World's Top Lessor" by ''AirFinance Journal'' and ''Airline Economics'' magazines.
In September 2018, GE hired
Goldman Sachs
Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
to review GECAS' strategy as its portfolio value declined since 2012 from $34.1 to $23.6 billion, evaluating a full sale or a
company break-up like Guinness Peat Aviation from which it emerged in 1993.
Services
GECAS' successor "AerCap" maintains a portfolio of narrowbody and widebody passenger aircraft, cargo aircraft, regional jets, and turboprop aircraft from manufacturers such as Airbus, Boeing,
Embraer
Embraer S.A. () is a Brazilian multinational aerospace manufacturer that produces commercial, military, executive and agricultural aircraft, and provides aeronautical services. It was founded in 1969 in São José dos Campos, São Paulo, where i ...
,
Bombardier and
ATR ATR may refer to:
Medicine
* Acute transfusion reaction
* Ataxia telangiectasia and Rad3 related, a protein involved in DNA damage repair
Science and mathematics
* Advanced Test Reactor, nuclear research reactor at the Idaho National Laboratory, ...
. Through its Milestone Aviation Group, GECAS also owns and leases
AgustaWestland
AgustaWestland was an Anglo-Italian helicopter design and manufacturing company, which was a wholly owned subsidiary of Finmeccanica (now known as Leonardo). It was formed in July 2000 as an Anglo-Italian multinational company, when Finmeccanica ...
,
Sikorsky and Airbus Eurocopter helicopters. Customers finance these aircraft through the following GECAS offerings:
* Operating leases
* Purchase leaseback agreements
* Secured loans
* Aircraft servicing
Additionally, GECAS's successor "AerCap" buys, leases and finances aircraft engines from GE and CFM, as well as from manufacturers Rolls-Royce, Pratt & Whitney, IAE and
Engine Alliance
The Engine Alliance (EA) is an American aircraft engine manufacturer based in East Hartford, Connecticut. The company is a 50/50 joint venture between GE Aviation, a subsidiary of General Electric, and Pratt & Whitney, a subsidiary of Raytheon ...
. GECAS provides the following for its engine pool:
* Operating leases
* Short-term leases
* Purchase leaseback agreements
* Secured loans
* Engine exchange
* Engine servicing
GECAS distributed re-certified engine and aircraft parts through its Asset Management Services group. The company maintains an inventory of parts from Airbus, Boeing, Douglas and Bombardier aircraft that have been overhauled, repaired or modified, and distributes these parts from warehouses in North America, Europe and Asia.
GECAS previously operated AviaSolutions, which provided aircraft consultancy services to airports, investors and financial institutions, governments and airlines. AviaSolutions advised clients on business development, route development, infrastructure planning, airline management, regulations, and various other projects.
Merger with AerCap
In March 2021, General Electric and
AerCap
AerCap Holdings N.V. is an Irish aircraft leasing company based in Dublin. It became the largest aircraft leasing company in the world after acquiring International Lease Finance Corporation (ILFC) in 2014, then GECAS from General Electric in ...
announced an agreement to merge the two lessors.
The transaction simplifies GE and focuses it on its industrial core—
Power
Power most often refers to:
* Power (physics), meaning "rate of doing work"
** Engine power, the power put out by an engine
** Electric power
* Power (social and political), the ability to influence people or events
** Abusive power
Power may a ...
,
Renewable Energy
Renewable energy is energy that is collected from renewable resources that are naturally replenished on a human timescale. It includes sources such as sunlight, wind, the movement of water, and geothermal heat. Although most renewable energy ...
,
Aviation
Aviation includes the activities surrounding mechanical flight and the aircraft industry. ''Aircraft'' includes fixed-wing and rotary-wing types, morphable wings, wing-less lifting bodies, as well as lighter-than-air craft such as hot air ...
, and
Healthcare
Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health profe ...
—while significantly reducing GE Capital assets and generating proceeds to further de-risk and de-lever. For the first quarter of 2021, in connection with signing the transaction agreement, GE will record an approximate $3 billion non-cash charge and report GECAS as a discontinued operation. At closing, the remainder of GE Capital, including
Energy Financial Services (EFS) and the company’s run-off insurance operations, will transition to GE Corporate. This means GE will report industrial-only financials and move from three-column to simpler one-column financial statement reporting.
After the deal closes, GE intends to use the transaction proceeds and its existing cash sources to reduce debt by approximately $30 billion, for an expected total reduction of more than $70 billion since the end of 2018. GE also expects to continue to execute significant additional debt reduction and increase earnings to reach its Industrial leverage target of less than 2.5x net debt to
EBITDA
A company's earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, pronounced , , or ) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, stat ...
over the next few years.
In November 2021, AerCap announced the completion of a merger with GECAS.
References
{{Use dmy dates, date=August 2019
Aircraft leasing companies
Companies based in Norwalk, Connecticut
Financial services companies established in 1967
Financial services companies disestablished in 2021
Former General Electric subsidiaries
General Electric Commercial Finance subsidiaries
General Electric Infrastructure subsidiaries
1967 establishments in the United States
2021 disestablishments in the United States
2021 mergers and acquisitions