- Avolon, I Squared Capital and ADIA have agreed to establish Constellation Aviation.
- The platform will acquire a seed portfolio of 22 aircraft valued at €1.19bn from Avolon.
- The aircraft have an average age of about five years and are leased to 17 airlines in 15 countries.
- Avolon will retain a minority equity interest and serve as exclusive aircraft manager.
- The joint venture aims to scale as demand for aviation infrastructure grows.
Avolon, I Squared Capital and a wholly owned subsidiary of the Abu Dhabi Investment Authority have agreed to establish Constellation Aviation, a new aircraft leasing and infrastructure investment platform. The joint venture combines long-term institutional capital with Avolon’s aircraft origination, leasing and asset management expertise. The transaction is expected to close subject to regulatory approvals.
Constellation will acquire a seed portfolio of 22 modern, fuel-efficient aircraft with a current market value of €1.19bn from Avolon. The aircraft have an average age of approximately five years and are on lease to 17 airlines in 15 countries. Avolon will retain a minority equity interest and serve as Constellation’s exclusive aircraft manager and servicer. The joint venture will be supported by a syndicated debt facility provided by a group of international banks.
Constellation is expected to scale over time, capitalising on structural trends in the aviation market. These trends include continued growth in passenger demand, constrained aircraft manufacturing capacity and airlines’ increasing reliance on leasing to finance fleet renewal and expansion. The platform provides airlines with access to fleet capacity and investors with exposure to long-term contracted cash flows.
Ross O’Connor shared “We are delighted to announce the agreement to launch Constellation Aviation with I Squared Capital and ADIA. The joint venture will combine long-term institutional capital with Avolon’s leasing, servicing and asset management expertise. Constellation will expand our asset management business and reflects the confidence leading institutional investors place in aviation and Avolon’s ability to originate, manage and service high-quality assets.”
Gautam Bhandari shared “Aircraft manufacturers’ order books now stretch a decade or more into the future, and airlines rely on lessors with scale and aircraft delivery slots to grow their fleets. Avolon has one of the largest order books with Boeing and Airbus and thus enjoys significant benefits of scale. Partnering with Avolon gives Constellation immediate access to a modern aircraft portfolio and a proven origination and servicing platform. Together with ADIA, we look forward to building Constellation into a leading aviation infrastructure leasing platform.”
Khadem AlRemeithi shared “Aircraft leasing is a resilient and growing sector supported by strong structural demand for modern aircraft. The Constellation platform brings together two like-minded investors with one of the world’s leading operators to meet that demand.”
