Key facts
- KKR is investing $1.4 billion in aircraft leasing through its partner Altavair.
- The investment is driven by limited aircraft supply from Airbus and Boeing and recovering airline demand.
- KKR will acquire aircraft from airlines, manufacturers, and the secondary market.
- The firm targets long-term leases with established airlines and cargo operators.
- KKR has invested over $12 billion in aviation since 2015.
Private equity firm KKR is significantly expanding its presence in the aviation sector with a new $1.4 billion investment in aircraft leasing through its partner Altavair. This move comes as airlines grapple with persistent supply chain issues from major manufacturers like Airbus and Boeing, leading to tight aircraft availability.
The strategy involves acquiring aircraft and leasing them to passenger and cargo airlines globally. KKR plans to source these assets directly from airlines looking to generate cash, from manufacturers, and through secondary market transactions. These deals typically involve sale-and-leaseback agreements, allowing airlines to raise capital while maintaining fleet operations.
KKR is focusing on long-term leases with established carriers, avoiding distressed situations like that of Spirit Airlines, which recently ceased operations. Since 2018, KKR and Altavair have already acquired 188 aircraft and engine assets and leased them to 67 customers worldwide. The firm views the investment as offering predictable cash flows over typical five-to-10-year lease terms, with fuel price volatility and geopolitical tensions having limited near-term impact.