General
Electric (GE) on Wednesday announced an agreement to combine its aircraft leasing
unit ‘GE Capital Aviation Services’ with Irish peer AerCap as the COVID-19 pandemic prompted lockdown caused a significant downturn
in air travel. General Electric and AerCap are two of the biggest players in
the aircraft leasing business and the former has agreed to a $30 billion tie-up,
reported AFP.

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Speaking on the tie-up, GE
chairman and CEO Lawrence Culp said that the creation of “an industry-leading
aviation leaser” gives GE “cash and a meaningful stake in the
stronger combined company” as the aviation industry undergoes recovery.

According to Lawrence, GE will have a 46% stake and $24 billion in cash in the merged holding.

“The
combined company will be an industry leader across all areas of aviation
leasing, with over 2,000 owned and managed aircraft,… over 300 owned
helicopters and approximately 300 customers around the world,” AerCap said
in a statement.

The GE aviation unit merger is corporation’s latest significant move under the leadership of Culp, who assumed control of the company in 2018 amid a deep slump in the industry.

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GE plans to reduce its debt by around $30 billion, using proceeds from the
transaction and existing cash sources, bringing its total reduction in debt
since the end of 2018 to more than $70 billion, said an AFP report.

On the other hand, AerCap reported a gain of $1.1 billion in 2019 while it suffered a loss of $299 million in 2020.

The tie-up, subject to approval by shareholders and regulatory approvals, is
expected to close in the fourth quarter of 2021.

Meanwhile, the air travel industry continues to struggle although travel is expected to pick up
as coronavirus vaccinations become more widespread.