Azernews.Az

By Bloomberg

Dubai Aerospace Enterprise Ltd. is looking at Boeing Co. and Airbus Group NV aircraft amid plans to accelerate the expansion of its plane-leasing business using cash from selling a maintenance unit.

The state-controlled lessor will increase the value of its fleet to $7 billion in “substantially less than five years” from about $4 billion now, Chief Executive Officer Firoz Tarapore said in a phone interview. To propel growth for the next decade it’s looking at models such as Boeing’s wide-body Dreamliners and narrow-body Max planes as well as Airbus’s single-aisle Neos, he said.

The move signals an improved outlook for DAE after it canceled the bulk of its orders with the two aircraft manufacturers in 2010 as the global financial crisis clipped demand. The lessor, which started operations in 2006, increased net income by 43 percent to 586 million dirhams ($160 million) in 2014.

DAE announced on Tuesday that it would sell U.S.-based maintenance company StandardAero to an affiliate of private- equity firm Veritas Capital. Tarapore declined to reveal the value of that deal or how much of the cash generated would be spent on planes. Some of the funds will also be invested in a project that may involve engineering services at Dubai World Central, the sheikdom’s second hub, he said.

If DAE spends $3 billion on jets, that would be enough to buy 10 baseline 787-8 Dreamliners at about $218 million apiece plus nine of the smallest 737 MAX 7s at almost $88 million each, based on list prices.

Africa Focus

The company is in continuing discussions with a number of aircraft makers including Airbus and Boeing and is “looking at the sale-leaseback opportunities in the market,” Tarapore said.

Africa, where the Avions de Transport Regional ATR 72 turboprop is suited to a range of operators, will be a particular focus, Tarapore said. The company signed an order for 40 ATRs -- made by a partnership of Airbus and Finmeccanica SpA -- at the Singapore Airshow last year.

“We are very under-penetrated in Africa and looking to build our portfolio there aggressively,” Tarapore said.

DAE is open to further acquisitions if they’re based in Dubai or have strategic importance to the emirate’s aviation sector.

“Whatever we do it will have a strategic connection to Dubai,” Tarapore said, adding that the company does not need to raise funds in the near term.