Norman Liu assesses rise of GECAS as world's largest lessor


GECAS displaced ILFC as the aircraft lessor with the largest fleet size and asset value in 2010. Norman Liu spoke exclusively to CAPA about the company's success and the conditions of today's market.

CAPA: What is the composition of your order backlog?

GECAS has an order backlog of over 200 aircraft comprised of widely used, high demand operating lease assets:  A320s, B737s, A330-300s, B777-300ERs. In addition, GECAS recently announced an MOU to purchase up to 10 C919 aircraft from COMAC

CAPA: What aircraft types are you focussing on, in terms of acquisition?

We are focussed principally on the same types of aircraft we have on order backlog in terms of lease financing. We also offer an array of additional products and services such as secured lending, engine leasing and airframe part-outs.

CAPA: Are you (as a lessor or investor) in favour of or against a re-engined narrowbody product?

Whether an aircraft is re-engined or a new aircraft model is introduced, we are interested in acquiring aircraft that meets the needs of a wide base of operators.

CAPA: Do you see the CSeries and the COMAC C919 becoming serious contenders in the narrowbody market? Would GECAS be interested?

At last year’s Zhuhai Air Show we signed a memorandum of understanding (MOU) to purchase up to 10 C919 aircraft from COMAC. We are pleased to be associated with COMAC as they develop their commercial aircraft product offerings.

CAPA: What kind of year is 2011 shaping up to be?

It looks good. We appear to be in an upswing with strong growth in both passenger and cargo markets. Political and economic uncertainty … and fuel prices are a concern, but this industry has a way of adapting and continuing to grow.

CAPA: As a lessor, what are the main issues you consider when acquiring aircraft?

We favour aircraft with the most modern technology, low operating costs, versatility and a wide user base in order to build a portfolio that has excellent redeployment prospects.

CAPA: How do you view the current market?

As I mentioned, the industry appears to be in an upturn with solid growth, especially in the emerging markets.  In the developed markets, airlines have managed capacity well and are seeing good loads and improving yields.  The demand for aircraft in the developed markets is driven more by the need for replacement capacity.  

CAPA: Is there a particular market GECAS is targetting? Which markets are proving to be most lucrative?

GECAS has an extensive global presence.  We’re in 75 countries and we have 25 office locations. Most recently, we opened offices in Africa, one in Capetown and one in Ghana. This is a continuation of a decade-long strategy of moving resources into the local markets and being close to our customers. 

CAPA: What lessons did you learn from the global financial crisis of 2009?

The GECAS team has been through multiple industry cycles. We know our customers well and we move fast when problems occur.  And we weathered the recent 2009 financial crisis relatively well. We turned in solid financial results and maintained high fleet utilisation.

CAPA: GECAS has the largest fleet value of any lessor. What can you attribute to this success in claiming the top spot?

There are a number of key factors, including:

  1. A solid global distribution network;
  2. A broad array of fleet, financing and productivity solutions;
  3. Top tier GE Capital funding;
  4. A strong commitment by General Electric to the airline industry;
  5. A veteran team with hardware, financial, portfolio management and risk underwriting skills.

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More