DAE Moves To Seize Macquarie Airfinance Control

(MENAFN- The Arabian Post) Arabian Post Staff -Dubai

Dubai Aerospace Enterprise's leasing arm is nearing an agreement to acquire a controlling stake in Macquarie AirFinance, signalling a significant shift in the global aircraft leasing market as investors seek to capitalise on tight jet supply and strong airline demand.

Industry executives familiar with the discussions said Dubai-based DAE Capital is in advanced negotiations to take control of the leasing platform, which is owned by Macquarie Asset Management. While the structure and valuation of the potential transaction could not be confirmed, the move would rank among the most consequential aviation finance deals of the year, reshaping competitive dynamics among mid- to large-scale lessors.

DAE Capital, part of Dubai Aerospace Enterprise, manages a fleet of around 500 owned, managed and committed aircraft, according to its latest disclosures. The company has pursued steady expansion over the past decade, balancing acquisitions with organic fleet growth. A successful purchase of Macquarie AirFinance would substantially enlarge its asset base and deepen its exposure to narrowbody aircraft, which remain in high demand as airlines prioritise fuel efficiency and network flexibility.

Macquarie AirFinance oversees a portfolio of more than 200 aircraft leased to carriers worldwide. The platform has been viewed as an attractive asset given the resilience of lease yields and the scarcity value of in-production aircraft. Earlier reporting had identified DAE as one of the final bidders for the portfolio, alongside AviLease, backed by Saudi Arabia's Public Investment Fund, and Qatar-based Lesha Bank.

The bidding process unfolded against a backdrop of supply constraints at Boeing and Airbus. Both manufacturers are grappling with production bottlenecks, regulatory scrutiny and parts shortages that have slowed deliveries. Boeing's 737 MAX programme has faced renewed oversight from US regulators following quality-control issues, while Airbus continues to manage supply chain pressures affecting its A320neo family ramp-up. The resulting delivery delays have limited the availability of new aircraft, pushing airlines to rely more heavily on leased fleets to meet capacity growth.

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That imbalance has strengthened lessors' bargaining power. Lease rates for popular narrowbody types have climbed, and trading values for mid-life aircraft have stabilised or increased after years of softness during the pandemic. Aviation consultancies report that sale multiples for established leasing platforms have improved as investors anticipate sustained cash flows and asset appreciation in a constrained supply environment.

For Macquarie Asset Management, a divestment would align with a broader strategy of realising value from mature infrastructure and real asset holdings. The group has periodically rotated capital out of aviation investments, particularly as competition intensifies and scale becomes more critical to maintaining cost efficiencies and access to funding.

DAE's interest reflects its ambition to cement its status among the leading global lessors. The company has previously expanded through portfolio acquisitions, including deals in Europe and Asia, and has diversified funding sources through bond issuances and bank facilities. Strengthening its fleet profile could enhance economies of scale, improve negotiating leverage with manufacturers and airlines, and broaden relationships with maintenance providers.

Competition from state-backed players has also intensified. AviLease, established as part of Saudi Arabia's aviation development strategy, has been building a portfolio to support the kingdom's ambitions to expand air connectivity. Lesha Bank's involvement underscored Qatar's continued interest in aviation finance, complementing the presence of established lessors linked to Gulf carriers.

Market participants caution that any transaction would need to address financing conditions and regulatory approvals across multiple jurisdictions. Aircraft leasing deals typically involve complex asset transfers, novation of lease agreements and coordination with airline customers. Debt markets remain supportive for high-quality aviation credits, although borrowing costs are higher than in the ultra-low rate era that preceded the pandemic.

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Airline balance sheets have improved since global travel demand rebounded, with passenger traffic in many regions surpassing 2019 levels. Carriers are seeking additional lift to capture growth in leisure and long-haul markets, particularly across Asia-Pacific and the Middle East. Yet delivery delays have forced many to extend leases on existing aircraft or source lift from the secondary market, further underpinning demand for leasing platforms.

Analysts note that consolidation among lessors is likely to continue as scale confers advantages in funding, risk diversification and manufacturer relations. Larger portfolios allow for better asset trading, portfolio optimisation and access to capital markets on favourable terms. A combined DAE and Macquarie AirFinance platform would move closer to the upper tier of global lessors, competing more directly with established giants such as AerCap and SMBC Aviation Capital.

For Dubai Aerospace Enterprise, whose activities span engineering, maintenance and asset management alongside leasing, the acquisition would reinforce its position as a central player in the region's aviation ecosystem. The Middle East has positioned itself as a strategic hub linking Europe, Asia and Africa, with airlines expanding fleets to support long-haul transit traffic and point-to-point growth.

Also published on Medium.

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