AerCap Set to Purchase Twenty Cargo Planes in Massive Deal with IAI
AerCap, an Irish-based enterprise specializing in aircraft leasing, is set to acquire twenty cargo planes from Israel Aerospace Industries (IAI), a prominent player in the realm of aviation and defense operations with close links with the Israeli Defence Forces. This agreement emerges in the broader context of both its existing business ventures and the ongoing unrest in the Gaza Strip.
The relationship between AerCap, situated in Dublin, and IAI was initially established in 2019 with the collaborative efforts on a project to repurpose Boeing 777-300 passenger aircraft into cargo-carrying planes. Branded as ‘Big Twin’, the venture holds particular importance as the resulting cargo planes will spearhead as some of the most substantial in service.
The commercial terms of the business tie-up approximate to $400 million or €340 million. As part of its deal with IAI, AerCap has placed an order for a fleet of twenty planes with an added provision to purchase an additional ten aircraft. This notably after the project tasted multiple hindrances and held-ups over the years.
After an extensive wait, the first converted plane was given a green light to commence operations by the authoritative aviation bodies of both the US Federal Aviation Administration and the Civil Aviation Authority of Israel. State-owned enterprise IAI, responsible for the plane’s conversion, maintains a close association with the Israeli Defence Forces (IDF).
IAI, backed by the Israeli government, is a major supplier of equipment and machinery for the military operations ongoing in the Gaza Strip. The aircraft to be purchased by AerCap from IAI will subsequently be leased to a range of other cargo-centric airlines.
One of the IDF’s primary equipment suppliers, IAI, also has an extensive catalog of products ranging from missiles, integrated weapon systems for fighter jets, to air-defense modules. This portfolio extends to include more complex inventions like vast unmanned drones and smaller quadcopters, also referred to as ‘loitering munitions.’
After IAI successfully delivers the inaugural freighter 777-300 aircraft, AerCap plans to lease it to the US-based cargo airline, Kalitta Air. The latter enjoys a reputation as a leading source of commercial aircraft resources for the US Air Force Mobility Command. Interestingly, Kalitta Air’s operational history encompasses key roles during the Gulf War in the 1990s.
The aviation industry counts upon leasing of aircraft as a standard practice, and Ireland has established itself as a central hub for many related companies. Quantitatively, companies located in Ireland own approximately a fourth of the world’s commercial aircraft.
In recent times, specifically in May of this current year, AerCap was listed among many Irish enterprises engaged in leasing aircraft to operators assigned the task of running deportation flights for the US Immigration and Customs Enforcement (ICE). The Irish government has continued its support to these companies through funding and investment initiatives.
The government’s support specifically extends to AerCap, which received backing from the Department of Enterprise via the intermediary of IDA Ireland. At the time, a media press release underscored the resulting creation of more than 100 new roles requiring high skill sets within Ireland.
The exact investment amount has yet to be made public. However, the support underscores the strategic role of the aviation industry in Irish economic policy. Coupled with the broad international implications of AerCap’s business dealings, these events show the intertwining nature of global commerce and politics.