Avolon has agreed to establish Constellation Aviation (Constellation), a new aircraft leasing investment platform, through a joint venture with infrastructure investor I Squared Capital and a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA).
The platform will combine long-term institutional capital with Avolon’s aircraft leasing expertise, providing airlines with access to fleet capacity and investors with exposure to long-term contracted cash flows.
Subject to completion of the transaction, Constellation is expected to acquire an initial portfolio of aircraft from Avolon with a current market value of US$1.4 billion. The portfolio comprises 22 modern, fuel-efficient aircraft, with an average age of approximately five years, leased to 17 airlines across 15 countries.
Constellation is expected to grow over time, benefiting from structural trends in the aviation market, including rising passenger demand, constrained aircraft manufacturing capacity and airlines’ increasing reliance on leasing to finance fleet renewal and expansion.
Avolon will retain a minority equity stake in the venture and act as its exclusive aircraft manager and servicer, providing leasing, asset management and technical expertise.
The transaction remains subject to the necessary regulatory approvals. The joint venture will be supported by a syndicated debt facility provided by a group of leading international banks.
