Dubai firm in talks to acquire hundreds of new jets

28 August 2018
Dubai Aerospace Enterprise plans to issue a sukuk before year-end

Aircraft leasing and management firm Dubai Aerospace Enterprise (DAE) is in talks with US-based Boeing and France-based Airbus France for a potential order of about 400 narrow-body aircraft, according to its CEO, Firoz Tarapore.

The planned order is in line with the firm’s goal to double its aircraft fleet, which currently stands at 375, over the coming decade, cites a local media report.

To do this, the firm needs to sell about 300 and buy about 500 new aircraft over the next eight to 10 years due to “technology changes going through the fleets.”

However, Tarapore stressed the firm will place the order “when the pricing and timing is right” since the current supply situation “is impacting rental levels negatively and making them inconsistent with the acquisition prices of aircraft.”

According to the report, DAE is also scouting for new acquisitions and preparing for a “large liquidity event” in the next two months since its previous plan to issue a $500m sukuk next year has now been pushed forward.

“You will see us evaluate a large unsecured debt issuance, or a sukuk, or another form of alternative liquidity. And this will be a 2018 event, not a 2019 one,” Tarapore said.

DAE reported record revenues and profits in the first half of 2018, due in large part to its merger with Dublin-based Awas, one of the world’s largest aircraft leasing companies.

Revenues rose to $711.4m between January and June this year, up from $228.7m during the corresponding period last year. Profit before tax also rose to $224m from $42.5m a year ago.

The government-backed firm said it purchased 15 aircraft, disposed of eight other aircraft and closed a total of $774.5m of borrowings in the first half of 2018. It also sold 16 aircraft with a total market value of $900m.

DAE and Awas completed their merger in August last year. At the time of the merger, it was understood that the combined company has 394 owned, managed and committed aircraft units with a total value in excess of $14bn.

 

 

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