DAE seals $7bn Macquarie AirFinance takeover

Dubai Aerospace Enterprise has agreed to acquire Macquarie AirFinance in an all-cash transaction valued at about $7 billion, marking one of the largest aircraft leasing deals of the year and significantly expanding the Gulf-based lessor’s global footprint. The transaction, which is expected to close in the second half of 2026 subject to regulatory approvals and customary conditions, will create a combined fleet of 1,029 owned, managed and committed aircraft.

The acquisition positions the Dubai-headquartered lessor among the world’s leading aircraft leasing groups at a time when airlines are rebuilding capacity and modernising fleets. Once completed, narrowbody aircraft will account for roughly 70 per cent of the enlarged portfolio, reflecting sustained airline demand for single-aisle jets such as the Airbus A320neo family and Boeing 737 MAX, which dominate short- and medium-haul routes.

Macquarie AirFinance, owned by funds managed by Macquarie Asset Management, has built a sizeable global portfolio over the past decade, with aircraft placed across multiple continents and with a broad range of carriers. By integrating those assets, DAE is expected to add 37 new airline customers to its roster, deepening its presence in North America, Europe and Asia-Pacific and diversifying counterparty exposure.

DAE’s management has framed the transaction as a strategic move to scale up during a phase of structural tightness in aircraft supply. Production constraints at major manufacturers have extended delivery timelines, increasing the appeal of leasing as airlines seek flexibility without committing capital to large upfront purchases. Industry data show lease penetration in commercial aviation hovering near record levels, with a significant proportion of the global fleet now financed through operating leases.

The enlarged entity’s emphasis on narrowbody jets underscores broader market dynamics. Single-aisle aircraft have become the backbone of airline networks, particularly as carriers prioritise fuel efficiency and route flexibility. High-density, short-haul traffic has rebounded strongly, and airlines continue to phase out older, less efficient models to meet environmental targets and manage operating costs. A 70 per cent narrowbody share suggests DAE is aligning its balance sheet with this shift, while maintaining exposure to widebody aircraft that serve long-haul markets.

Macquarie AirFinance’s existing portfolio includes aircraft on lease to a mix of full-service and low-cost carriers, providing steady cash flows under long-term contracts. Analysts have noted that consolidation in the leasing sector has accelerated in recent years, driven by higher interest rates, the need for scale, and capital recycling by financial sponsors. Large transactions have reshaped the competitive landscape, as players seek broader funding bases and stronger bargaining power with manufacturers and airlines.

For DAE, the acquisition also represents a further step in its transformation from a regional lessor into a global platform. Established in 2006 and ultimately owned by the Investment Corporation of Dubai, the company has steadily expanded through organic growth and selective purchases. Its portfolio prior to the deal already spanned hundreds of aircraft on lease to carriers in more than 50 countries. The addition of Macquarie AirFinance’s assets will lift its managed and committed fleet past the 1,000-aircraft threshold, a symbolic milestone in an industry where scale underpins access to capital markets and competitive pricing.

Funding for the all-cash purchase is expected to draw on a combination of existing liquidity and new financing facilities. Aircraft lessors typically rely on a mix of bank debt, unsecured bonds and export credit structures. Market participants will closely watch how DAE structures the financing, particularly in an environment where borrowing costs remain elevated compared with the ultra-low rate period that followed the pandemic.

The deal also highlights the continued appetite of Middle Eastern aviation investors for global expansion. Dubai has long positioned itself as a hub for aviation finance, leveraging its geographic location and strong sovereign backing. DAE’s move comes as airlines across the Gulf and beyond pursue fleet renewal and capacity growth strategies, reinforcing the region’s central role in global air transport.

Legal and financial advisers are playing a prominent role in the transaction. DAE was advised by Allen Overy Shearman Sterling LLP and KPMG, according to company statements. Regulatory clearances will be required in multiple jurisdictions, reflecting the international spread of the aircraft and airline customers involved.

Industry executives have indicated that the integration process will focus on maintaining continuity for airline clients while capturing efficiencies in asset management and financing. Lease transfers, technical oversight and customer relationships are typically preserved under existing contractual terms, with the acquiring lessor stepping into the shoes of the seller.