Cerberus buys Abelo, Azorra acquires Embraer portfolio

The  implications of Cerberus' Abelo acquisition

Private equity firm Cerberus Capital Management (Cerberus) has acquired turboprop lessor Abelo from funds managed by Oaktree Capital Management. Dublin-headquartered Abelo was formed in 2022 following the merger between Elix and ADARE Aviation Capital, and has been led by Stephen Gorman, CEO.

Gorman, commenting on the sale, stated that having Cerberus as a new partner means, “We’re well-positioned to accelerate our growth, deepen our customer relationships, and continue delivering solutions that support more efficient and sustainable air connectivity around the world.”

The Ishka View:  Cerberus has been eyeing up the smaller aircraft market for some time. Cerberus is understood to have been one of the bidders for both NAC and Falko, losing out to DAE and HPS, respectively. Cerberus has succeeded in acquiring Abelo, but the acquisition does beg some questions. For a start with just 60 turboprops Abelo is considerably smaller in scale than either NAC or Falko. Falko had approximately 226 aircraft at the time it was acquired by HPS, split across Embraer, ATR, Bombardier, and Airbus aircraft. NAC was even bigger, and included roughly 250 owned and committed assets when it was acquired by DAE. Is Abelo big enough to satisfy Cerberus’ ambitions, and if not, what does this mean for the turboprop or even the regional aircraft segment? Could Abelo look to compete more aggressively with regional jet lessors Falko, Azorra, or TrueNoord? If so, could this mean further consolidation between leasing platforms or more aircraft orders?

 

DAE sells  E-Jet portfolio to Azorra

Aircraft lessor Azorra is understood to have acquired a 49  Embraer aircraft portfolio and two CF-34 engines from leasing firm Dubai Aerospace Enterprise (DAE). The deal which is yet to be announced comes off the back of DAE’s successful acquisition of NAC which was announced at the start of May.  NAC had an estimated enterprise value of $2 billion at the time of DAE’s acquisition.

Ishka notes that NAC’s Embraer aircraft are not listed in DAE’s current fleet table accessible on its website. Following the acquisition of NAC, DAE announced in May it has a fleet of approximately 650 owned and managed aircraft making it the third largest lessor by number of aircraft. DAE has stated that it has a committed pipeline of a further 100 aircraft. DAE and Azorra were unavailable for comment as Ishka went to press.

The Ishka View: One reason why NAC was harder to sell compared to some other leasing platforms was due to the varied nature of its fleet. NAC worked hard ahead during the pandemic to reduce the size of the firm, as well as acquire more narrowbodies to make it more attractive to a wider group of buyers. DAE appears to have immediately spun off a decent portion, if not all, of the Embraer aircraft it acquired from NAC to Azorra. For Azorra, the world’s largest Embraer lessor, the sale allows it to expand its Embraer offering. The lessor has a combined total of 22 firm aircraft orders for Embraer E2 jets with options for a further 26 aircraft.

 

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