09 May 2025

#2 May 2025: North American Aviation Newsletter

Aviation Capital Group to Acquire 20 Aircraft from Avolon in Strategic Portfolio Expansion

Aviation Capital Group (ACG) has signed a definitive agreement with Avolon Aerospace Leasing Limited to acquire a 20-aircraft portfolio, comprising 16 narrowbody aircraft (12 of which are new technology) and 4 wide-body aircraft (all new technology). The average age of the portfolio is 4.1 years, with an average remaining lease term of 8.4 years, and the aircraft are currently on lease to 17 airlines across 16 countries, including six new customers for ACG.

CEO and President Thomas Baker commented:

“These aircraft are an excellent complement to our existing portfolio. This acquisition, with a trusted partner in Avolon, reflects ACG’s strategic focus on growth, commitment to invest in fuel-efficient new technology aircraft, and ability to transact at scale. ACG will continue to seek out further scaled investment opportunities as we accelerate our growth momentum.”

This transaction supports ACG’s strategy to strengthen its new-technology footprint while diversifying its customer base in both the narrowbody and widebody segments.

Spirit AeroSystems Signs Divestiture Deal with Airbus as Boeing Acquisition Nears

Spirit AeroSystems Holdings Inc. has announced a definitive agreement with Airbus SE to transfer ownership of selected production assets and sites involved in Airbus aerostructures manufacturing. The move is part of Spirit’s broader restructuring strategy as it prepares to finalise its acquisition by The Boeing Company.

Both the Airbus divestiture and Boeing acquisition are subject to regulatory approval and are expected to close by Q3 2025.

Irene Esteves, Executive Vice President and Chief Financial Officer of Spirit AeroSystems, said:

“For many years, Spirit’s collaboration with Airbus allowed us to deliver aerostructures for some of their most important aircraft programs. Entering into this agreement is a significant milestone as we work towards the closing of the Boeing acquisition, to the benefit of Spirit, its stockholders and other stakeholders.”

The deal marks a pivotal development in the ongoing realignment of major aircraft OEM supply chains, as Airbus and Boeing solidify control over critical production lines and reduce third-party dependency.

Willis Lease Finance Corporation Closes Three Additional JOLCO Transactions

Willis Lease Finance Corporation (WLFC) has closed three Japanese Operating Lease with Call Option (JOLCO) transactions in 2025, raising US$64.8 million in financing. The deals cover:

• A PW1127GA-JM engine (maturing 2033)
• A PW1133G-JM engine (maturing in 2033)
• A LEAP-1A engine (maturing in 2034)

These new closings bring WLFC’s total JOLCO activity to US$119.8 million, reinforcing the company’s strategy to leverage global capital sources for engine leasing and asset-backed financing solutions.

Scott B. Flaherty, EVP and CFO at WLFC, stated:

“The JOLCO market remains an attractive way to diversify financing options and we’re proud to deepen our relationship with Japanese counterparties. Through global capital sources like this, WLFC is able to offer our airline customers compelling lease and financing solutions.”

The transactions highlight the continued relevance of Japanese structured finance in aviation, particularly for engine lessors seeking long-term, flexible capital.

Acumen’s Take

On ACG’s 20-Aircraft Deal with Avolon

This is a textbook example of scale-focused secondary market consolidation, with ACG smartly acquiring a youthful, globally placed portfolio to meet rising demand for new-technology aircraft. The geographic and customer diversity, along with long lease tenures, will provide cash flow stability and residual value protection, especially amid tightening OEM delivery timelines.

On Spirit AeroSystems’ Divestiture to Airbus

This marks a strategic recalibration of Spirit’s future under Boeing ownership. The divestiture not only streamlines Spirit’s operations but also helps Airbus regain vertical control of its aerostructures supply chain. Acumen sees this as a signal of greater OEM consolidation ahead, as both Airbus and Boeing seek greater oversight and resilience across their production ecosystems.

On WLFC’s Growing JOLCO Activity

WLFC’s deepening involvement in JOLCOs reflects the enduring appeal of Japanese tax-leveraged leases, especially for engine financing, where residual values are increasingly attractive. These structured deals offer WLFC a competitive financing edge, allowing it to expand its leasing footprint in a market where capital cost optimisation is critical.
 

Acumen Aviation © 9 May 2025 All Rights Reserved.