US lessor Aviation Capital Group (ACG) is teaming with Egyptian private and public shareholders to establish a leasing joint venture focusing on the Middle East and Northern Africa region.
A partnership deal for the new joint venture, which is named Civil Aviation Finance and Operating Leases (CIAF-Leasing) and will initially focus on narrowbody aircraft, was signed today.
Under the agreement a mix of Egyptian entities, including Egyptair and the financial arm of the Egyptian civil aviation sector, will hold 90% of the joint venture and ACG the remaining 10%. The latter will act as manager of CIAF-Leasing under a five-year agreement with renewal options.
Speaking at a press conference to mark the signing, chairman and chief executive of Egypt's Civil Aviation Finance Holding, former Egyptian finance minister Professor Mehat Hassanein, said details of CIAF-Leasing's capitalisation will be disclosed shortly as it moves closer to starting operations later this year after finalising the necessary Egyptian approvals.
"We expect we will have these in the fourth quarter of 2009," he said, adding he hopes the new leasing company will have finalised a couple of deals by the start of next year.
"We know in our business plan at the end of five years we think we will have a fleet of around 50 narrowbody aircraft," added Hassanein, noting that these aircraft are likely to be up to threeyears old. The aircraft will come from a variety of sources, including possibly ACG's portfolio and future aircraft slots, and from sale/lease-back deals.
"Cairo is already well-established as an aviation centre for airline, airport, maintenance and related operations. Aircraft is leasing is the next step in this progression," he says. "We think it will fill a gap in the financing requirements of airlines. There is demand here from Egyptian and Arab airlines."
ACG group managing director and chief executive Stephen Hannahs also cites the potential of the new venture. "You are bringing two very potent sides together; ACG and very significant companies on the Egyptian landscape," he says.