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Dubai Aerospace Enterprise to acquire 64 Boeing 737 Max from China firm

Delivery of the aircraft is scheduled to occur between 2023 and 2026

Dubai Aerospace Enterprise, a leading aircraft lessor, said on Monday that it signed a definitive agreement to acquire 64 Boeing 737 Max aircraft from a subsidiary of China Aircraft Leasing Group Holdings Limited (CALC) as it seeks to add certainty to its growth trajectory.

The portfolio includes 737-8, 737-9, and 737-10 variants. Delivery of the aircraft is scheduled to occur between 2023 and 2026. Terms of the transaction were not disclosed but DAE said the “definitive agreement” covers the rights, interests, and obligations of the jets held within a wholly-owned CALC subsidiary.

Firoz Tarapore, DAE’s chief executive officer, said the transaction with CALC will increase the percentage of new technology, fuel-efficient aircraft in its owned fleet to approximately 66 per cent from 50 per cent. “This transaction will add certainty to our growth trajectory. On a pro forma basis, this transaction will increase our fleet of owned, managed, committed, and mandated-to-manage aircraft to approximately 550 aircraft, valued at approximately $20 billion, said Tarapore.

He said the transaction would also allow the lessor to further deepen its existing relationship with Boeing and CFM International. “Since inception and including this transaction, DAE has acquired and is committed to acquiring approximately 500 Boeing aircraft. We look forward to growing this relationship even further in the coming years.”

Headquartered in Dubai, DAE, through its two divisions --- DAE Capital and DAE Engineering -- serves over 170 airline customers in over 65 countries from its seven office locations in Dubai, Dublin, Amman, Singapore, Miami, New York, and Seattle. In January, it reported that it acquired 94 aircraft, sold 33 aircraft, and signed 143 lease transactions in 2022. In its business transactions update for the full year 2022, it said it signed a new aircraft management mandate to acquire and manage up to $1.75 billion of aircraft assets.

The company said the 737 Max airplane family delivers enhanced efficiency, improved environmental performance, and increased passenger comfort to the single-aisle market. Powered by CFM International Leap-1B engines and advanced technology winglets, the 737 Max reduces fuel use and emissions by 20 per cent compared to the airplanes it replaces.

The 737-10 is the largest model in the 737 MAX family and can seat up to 230 passengers in a single-class configuration, flying up to 3,300 miles. The fuel-efficient jet can cover 99 per cent of single-aisle routes.

Tarapore said approximately 20 per cent of the acquired portfolio is on lease to airline clients who are also existing clients of DAE and we look forward to expanding our relationship with them. The remainder of the acquired portfolio of assets will be placed directly by DAE in the coming quarters, he added.

The transaction is expected to be completed in the third quarter of 2023 and is expected to have no impact on any of the company’s capital adequacy, liquidity, and funding ratios. DAE was advised by Milbank LLP and KPMG Ireland.

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