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AerCap facing greatest fleet exposure to Monarch collapse

Monarch Airlines’ entry into administration has AerCap and 14 other lessors likely seeking new homes for aircraft.

Flight Fleets Analyzer shows that US-listed lessor AerCap manages nine aircraft leased to the grounded carrier, including two owned by its AERLS 2007-1 ABS Portfolio securitisation. These comprise one 14-year-old A320 (MSN 2142) and eight A321s with an average age of 14.7 years.

All of the 10 A320s operated by Monarch are powered by CFM International CFM56 engines, while its 25 A321s are powered by International Aero Engines V2500s.

Furthermore, AerCap is also scheduled to do purchase-and-leasebacks of the UK leisure carrier’s first five of 35 on-order Boeing 737 Max 8s, the first of which is scheduled for delivery in March 2018.

Aviation Capital Group is the second-largest lessor exposed, managing and owning four of the A321s that range in age from 3.4 to 4.4 years.

Other managers exposed are AerGen Leasing, Avolon, Archway Aviation and Investec Global Aircraft Fund.

Including the two AERLS aircraft, a total of nine aircraft are owned by ABS vehicles. Other managers of those portfolios include DVB’s Deucalion Aviation Funds, Apollo Aviation Group, AerGen Leasing and Castlelake.

Monarch also operates one Boeing aircraft, a 737-800 leased from Air Lease, that was delivered in June.

BOC Aviation is also potentially exposed, with the airline confirming in June that it had entered into sale-and-leasebacks covering 13 737 Max 8s that are due for delivery between 2018 and 2022. Those aircraft were part of 15 options for the type that Monarch converted to firm orders at the Paris air show.

Monarch’s operations were grounded during the early hours of 2 October by administrators from KPMG. It is not clear yet if the administrators will seek to sell the airline as a going concern or choose to liquidate it.

The airline has previously noted that it has a number of challenging aircraft lease contracts. During the year ended October 2016 it made a £198 million (265 million) provision against its bottom line for unavoidable costs due to “onerous” lease contracts.

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