GE Capital Aviation Service (Gecas)

History

2021: AerCap Holdings bought GE Capital Aviation Service for $30 billion

In mid-March 2021, it became known that General Electric (GE) Corporation sold GE Capital Aviation Service (Gecas) to its Irish rival AerCap Holdings for $30 billion.

Both companies lease aircraft to airlines and startups, and their fleet includes a variety of types of aircraft, from passenger Boeing and Airbus to cargo aircraft and small funds for regional flights. The combined company will become one of the leading companies in the field of aviation leasing and will include complementary portfolios of aircraft, engines and helicopters.

AerCap Holdings acquired GE Capital Aviation Service for $30 billion

Gecas with a fleet of 1.6 thousand aircraft, whose assets at the end of 2020 were estimated at $35.9 billion, is considered one of the largest players in the aviation leasing market, along with the AerCap itself, which owns 1.4 thousand aircraft and assets worth $34 billion. However, during the pandemic, the income of aviation companies fell sharply due to a decrease in the number of flights. Gecas's loss for 2020 amounted to $786 million. Asset pooling should help Gecas and AerCap reduce costs and deal with the current crisis.

In turn, GE seeks to simplify its structure, concentrate on its main industrial activities and obtain funds to cover debts. Gecas is the largest division left over from GE Capital, GE's financial business. However, the parent company began to get rid of the assets of GE Capital back in 2015, since after the financial crisis of 2008-2009. these divisions became unprofitable and threatened the very existence of the company.

It is known that AerCap will pay $24 billion with its own funds, and the rest with the shares of the combined company. Thus, after the completion of the transaction, GE will continue to own 46% of the shares in the combined company. The transaction must be completed by the end of 2021.^[1]

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