Dubai: Dubai-headquartered Dubai Aerospace Enterprise (DAE) Ltd announced Monday that one of its affiliate companies has agreed to acquire 64 Boeing 737 MAX aircraft from a wholly-owned subsidiary of China Aircraft Leasing Group Holdings Limited (CALC). The order book portfolio includes 737-8, 737-9 and 737-10 variants. Delivery of the aircraft is scheduled to occur between 2023 and 2026.
This deal will raise DAE's aircraft fleet to around 550 planes, worth roughly $20 billion, according to DAE's CEO, Firoz Tarapore.
He said, “This transaction will further deepen our relationship with Boeing and CFM International. Since inception and including this transaction, DAE has acquired and is committed to acquire approximately 500 Boeing aircraft.”
Twenty per cent of the acquired portfolio is on lease to airline clients who are also existing clients of DAE. "The remainder of the acquired portfolio of assets will be placed directly by DAE in the coming quarters,” Tarapore added.
The transaction is expected to be completed in the third quarter of 2023 and will not impact the company’s capital adequacy, liquidity, and funding ratios. Terms of the transaction were not disclosed.
On a pro forma basis, this deal will also increase the percentage of new technology, fuel-efficient aircraft in DAE’s owned fleet to approximately 66 per cent from 50 per cent. 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.
DAE reported revenue of $670.1 million in the first six months of 2023, compared to $582.8 million in the year-ago period, a 15 per cent increase, the company said earlier this month.
Profit for the period stood at $141.1 million, compared to a loss of $397.8 million in the same period last year.
Operating profit for the six months ended June 30 was $319.8 million compared to an operating loss of $321.7 million in the year-ago period.