PIF-backed plane lessor AviLease on track to more than triple growth to $20bn by 2030

Bond sales and additional equity expected to drive company's expansion as it seeks 'more exposure' to Emirates and flydubai airlines

Standard Chartered executive Simon Cooper, left, with AviLease boss Edward O'Byrne. Photo: AviLease

AviLease, the plane lessor owned by Saudi Arabia’s Public Investment Fund, is on track to more than triple its growth to $20 billion by 2030 through dollar-denominated bond sales and additional equity from its owner.

The sovereign wealth fund unit plans to expand at a rate of $3 billion a year, with about $1.5 billion to $2 billion in bond issuances, AviLease's chief executive Edward O'Byrne told Bloomberg TV.

The Riyadh-based company expects to receive an investment-grade credit rating by the end of 2024, Mr O'Byrne said in the interview on Wednesday.

“The degree of growth we’re expecting in Saudi Arabia over the next 10 years is quite exceptional. We’re talking about tripling passenger traffic and more than doubling cargo traffic,” he said.

“PIF has committed additional equity to the balance sheet and we are thinking of deploying that equity over the period of the next seven years.”

AviLease said earlier this week that it will buy Standard Chartered's aviation finance business for $3.6 billion.

The Saudi company will acquire a portfolio of 100 narrow-body aircraft and become service provider for another 22. The combined platform will own and manage 167 planes.

The PIF-backed company will have a balance sheet of $6 billion and 167 jets after the acquisition is completed, with plans to expand to $20 billion and 300 aircraft by 2030, Mr O'Byrne said.

After the acquisition of the narrow-body jet portfolio, AviLease will “have a lot of capacity” to acquire wide-body aircraft, Mr O'Byrne said.

New airline start-up Riyadh Air, which is also backed by the PIF, placed an order for 39 Boeing 787 wide-body planes, with options for 33 more, to handle long-haul flights.

Riyadh Air is building its fleet of aircraft to reach 100 destinations by 2030, after it starts operations in early 2025.

“We will have more wide-bodies growth in Saudi Arabia, but we are bidding day in and day out on wide-body assets in the global market,” Mr O'Byrne said.

AviLease wants to grow its customer base to 100 airlines, up from 47 currently, and is in constant discussions with operators in the region, he said.

“We are friendly neighbours and want to grow the Middle East as an aviation centre … We do have exposure to flydubai and we want more exposure to flydubai and Emirates,” he said.

AviLease, which was founded in June 2022, is part of the PIF’s efforts to boost the kingdom’s aviation sector.

Saudi Arabia aims to attract more tourists and develop its aviation sector, increasing its contribution to non-oil gross domestic product as part of its Vision 2030 economic diversification agenda.

The Saudi Aviation Strategy calls for measures to triple annual passenger traffic to 330 million by 2030 and boost the number of destinations to 250, from 99 at present.

This strategy is backed by $100 billion in government and private sector investment.