Doing a €25bn deal during a pandemic

Top 1000: Aercap chief Aengus Kelly talks about creating the world’s largest leasing business

Lockdowns, hotel quarantines and a tough year for aviation failed to prevent Aercap chief executive Aengus Kelly from leading his company to a €25 billion deal that will create the world’s biggest aircraft leasing business.

In March, Aercap agreed to buy rival GE Capital Aviation Services (GECAS) for a mix of cash and shares worth $30 billion (€25 billion). The deal will leave the Dublin-headquartered group with more than 2,000 planes, 300 helicopters and 900 engines, about 3,200 assets in all.

Aercap buys aircraft from manufacturers including Airbus and Boeing using its own cash combined with debt. It then leases them to airlines around the world, using the revenues from the rent to pay off its loans and fund its ongoing business.

Buying GECAS will position the company to exploit opportunities when air travel recovers as Covid-19 recedes. Assuming that competition regulators approve it, the transaction should go ahead towards the end of this year, by which time most in the industry believe aviation’s rebound will be gathering momentum.



Kelly and his organisation shepherded the deal with the seller, US giant GE, through a period of tough restrictions on travel and other precautions, including a Government demand that people work from home where possible. The Aercap chief had to quarantine in hotels in Dublin several times during the process.

“You do that because you have to meet the people you are dealing with,” he says philosophically.

Meeting the other side in any transaction happens as a matter of course, particularly when it comes to tackling elements such as due diligence, but the real challenge was the internal one posed by the work-from-home guidelines. “There are times in any process when you have to be able to meet your own team internally,” Kelly says, “when you have to look at what needs to get done today and to analyse all the outcomes.”

That is when he says the hard decisions get made. So managing this while continuing to comply with everything required of the business was particularly difficult.

Aercap’s success in getting the GECAS agreement across the line was down to the “formidable” group of people working there, Kelly says.

Working from home posed no great challenge to the organisation. Aercap’s business normally requires staff to travel and operate from disparate locations in Europe, the Americas and Asia. So its systems were designed for remote working.

Nevertheless, the business had to make sure that its people had access to the information and other resources they needed to ensure the organisation continued to operate. Those operations oversee a $44 billion balance sheet and an aircraft order book worth $25 billion.

From the trough in March 2020 and through a difficult period again late last year, Kelly acknowledges that his colleagues kept delivering. “It came down to the dedication of our people.”

The organisation’s own culture of self-reliance was important too, he adds, as at the end of the day, it had no-one else it could call on.

Nevertheless, he believes a full return to the office – once that is possible – will suit Aercap best, arguing that working from home is not a recipe for success in any company.

“When you are not together you do not get the best outcomes, you get better decision making when people are together,” he says.


He does not believe that we are finally through the crisis, but says the market is recovering. Aercap has been tracking various trends throughout the world back to April last year. Demand is returning in China, which is further down the road than we are. Passenger numbers are improving, and, in a clear sign of rising confidence, queues formed outside luxury goods stores as lock downs started to ease.

How it will play out closer to home is harder to know. Kelly points out that Europe rebounded very rapidly during last summer’s respite from the worst of the pandemic. Along with many in his industry, he feels that short-haul air travel will recover first. “In the nearer term, people will stay closer to home,” he acknowledges.

The pace of long-haul’s recovery will be slower and will be determined by factors such as Asian’s people’s willingness to fly to Europe or the US. Business travel too will not bounce back automatically, but Kelly argues that it won’t take long before video conferencing’s limitations are exposed.

“If you see your competitor in front of your customer, then you are going to have to get in front of your customer too,” he says

It may take a few years, but he believes travel will come back, not least because so many people have been cooped up through a difficult time. “We all want to get a bit of sun and give ourselves a break,” he says.

No prizes, then, for guessing what he will be doing once restrictions lift.