AerCap and Air France Industries KLM Engineering & Maintenance Enter into Exclusive Negotiations to Form a LEAP Joint Venture

Rhea-AI Summary

AerCap Holdings (NYSE: AER) and Air France Industries KLM Engineering & Maintenance have entered exclusive negotiations to establish a joint venture focused on LEAP engine leasing. The partnership aims to support AFI KLM E&M LEAP Premier MRO customers globally by managing a fleet of CFMI LEAP-1A and LEAP-1B engines for Airbus A320neo and Boeing 737 MAX aircraft. This strategic collaboration combines AerCap's expertise in engine leasing and asset management with AFI KLM E&M's MRO capabilities. The joint venture will provide operators with uninterrupted fleet operations during engine maintenance periods and leverage the experience of both a global airline-MRO and a world-class aircraft lessor. The formation is subject to necessary approvals and builds upon the companies' existing cooperation in lease engines.

Positive

• Strategic partnership combining complementary expertise in engine leasing and MRO services
• Enhanced support for LEAP engine operators through combined experience of airline-MRO and aircraft lessor
• Improved access to spare engines for A320neo and Boeing 737 MAX operators
• Strengthened operational flexibility and continuity for customers

Negative

• None.

Insights

Aviation Industry Analyst

AerCap's strategic LEAP engine JV with AFI KLM E&M strengthens its position in the high-demand engine leasing market.

This joint venture represents a strategic market positioning for AerCap in the increasingly important LEAP engine leasing space. The partnership addresses a critical industry pain point: operators need reliable access to spare engines during maintenance periods to avoid costly aircraft downtime. With the global LEAP-powered fleet (A320neo and 737 MAX) growing substantially, this venture places AerCap at the intersection of two valuable services - engine leasing and maintenance.

The JV structure is particularly advantageous as it combines AerCap's engine leasing expertise with AFI KLM E&M's maintenance capabilities, creating an integrated service offering that few competitors can match. This vertical integration should drive operational efficiencies and potentially higher margins than standalone engine leasing.

For context, LEAP engines power the highest-volume commercial aircraft programs globally, with thousands of A320neo and 737 MAX aircraft in service or on order. Each requires multiple shop visits over its lifecycle, creating consistent demand for spare engines. The timing is strategic as the first wave of LEAP engines are approaching their initial performance restoration visits, creating growing demand for the exact services this JV will provide.

The venture also diversifies AerCap's revenue streams beyond traditional aircraft leasing, potentially reducing cyclicality in its business model and creating more predictable cash flows from MRO-related services. While financial details aren't disclosed, similar engine leasing operations typically generate attractive returns on invested capital.

LE BOURGET, France, June 17, 2025 /PRNewswire/ -- AerCap Holdings N.V. ("AerCap" or the "Company") (NYSE: AER) and Air France Industries KLM Engineering & Maintenance ("AFI KLM E&M") have announced today that they have entered into exclusive negotiations to form a LEAP engine leasing joint venture to support AFI KLM E&M LEAP Premier MRO customers worldwide.

Building on their existing cooperation around lease engines, AerCap and AFI KLM E&M intend to jointly own and manage a fleet of CFMI LEAP-1A and LEAP-1B engines enabling uninterrupted Airbus A320neo and Boeing 737 MAX fleet operations, while engines are going for a quick-turn or performance restoration shop visit within the AFI KLM E&M MRO network.

The formation of this joint venture, which is subject to any necessary approval, will strengthen the parties' strategic collaboration to leverage their combined and complementary expertise in engine leasing, asset management and MRO services, providing comprehensive MRO support to customers worldwide. Furthermore, the joint venture will benefit LEAP engine operators by offering the combined experience of a global airline-MRO that operates and maintains 'new gen' aircraft and engines with that of a world-class aircraft and engine lessor.

"We have been very pleased with the high level of service and support provided by AFI KLM E&M over the years," said Tom Slattery, Executive Vice President, AerCap Engines. "This new venture not only underscores the strength of our strategic partnership but also reflects the mutual trust and commitment between our two companies and further demonstrates our confidence in AFI KLM E&M's capabilities and our shared commitment to operational excellence. We look forward to advancing this successful collaboration through our new joint venture."

"This partnership represents a new chapter in our strategic relationship with AerCap," said Anne Brachet, EVP Air France Industries-KLM Engineering & Maintenance. "In a LEAP spare market where access to spares will be key for operators, by pooling our respective strengths in engine leasing and MRO services, we are enhancing our ability to support LEAP engine operators with greater flexibility and operational continuity. This new Joint Venture reflects our shared commitment to delivering innovative, customer-focused solutions that meet the evolving needs of the global aviation industry."

About AerCap

AerCap is the global leader in aviation leasing with one of the most attractive order books in the industry. AerCap serves approximately 300 customers around the world with comprehensive fleet solutions. AerCap is listed on the New York Stock Exchange (AER) and is based in Dublin with offices in Shannon, Miami, Singapore, Memphis, Amsterdam, Shanghai, Dubai and other locations around the world.

About AFI KLM E&M

Air France Industries KLM Engineering & Maintenance is a major multi-product MRO (Maintenance, Repair, Overhaul) provider. With a workforce of over 12,800, AFI KLM E&M offers comprehensive technical support for airlines, ranging from engineering and line maintenance to engine overhaul, aero structure, and fan thrust reverser support, as well as the management, repair, and supply of aircraft components, structured around a powerful logistics network. AFI KLM E&M supports almost 3,000 aircraft operated by 200 major international and domestic airlines. www.afiklmem.com

Forward-Looking Statements

This press release contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are "forward-looking statements". In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "may," "might," "should," "expect," "plan," "intend," "will," "aim," "estimate," "anticipate," "believe," "predict," "potential" or "continue" or the negatives thereof or variations thereon or similar terminology. All statements other than statements of historical fact included in this press release are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known and unknown risks, uncertainties and assumptions, and may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied in the forward-looking statements, including but not limited to the availability of capital to us and to our customers and changes in interest rates; the ability of our lessees and potential lessees to make lease payments to us; our ability to successfully negotiate flight equipment (which includes aircraft, engines and helicopters) purchases, sales and leases, to collect outstanding amounts due and to repossess flight equipment under defaulted leases, and to control costs and expenses; changes in the overall demand for commercial aviation leasing and aviation asset management services; the continued impacts of the Ukraine Conflict, including the resulting sanctions by the United States, the European Union, the United Kingdom and other countries, on our business and results of operations, financial condition and cash flows; the effects of terrorist attacks on the aviation industry and on our operations; the economic condition of the global airline and cargo industry and economic and political conditions; the impact of hostilities in the Middle East, or any escalation thereof, on the aviation industry or our business; trade tensions, including U.S. tariffs and retaliatory measures by China and other countries, and the resulting geopolitical uncertainty; development of increased government regulation, including travel restrictions, sanctions, regulation of trade and the imposition of import and export controls, tariffs and other trade barriers; a downgrade in any of our credit ratings; competitive pressures within the industry; regulatory changes affecting commercial flight equipment operators, flight equipment maintenance, engine standards, accounting standards and taxes; and disruptions and security breaches affecting our information systems or the information systems of our third-party providers.

As a result, we cannot assure you that the forward-looking statements included in this press release will prove to be accurate or correct. These and other important factors and risks are discussed in AerCap's annual report on Form 20-F and other filings with the United States Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the future performance or events described in the forward-looking statements in this press release might not occur. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. Except as required by applicable law, we do not undertake any obligation to, and will not, update any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information regarding AerCap and to be added to our email distribution list, please visit www.aercap.com.

 

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SOURCE AerCap Holdings N.V.

FAQ

What is the purpose of AerCap and Air France KLM's new LEAP engine joint venture?

The joint venture aims to provide LEAP engine leasing services to support AFI KLM E&M LEAP Premier MRO customers worldwide, ensuring uninterrupted fleet operations during engine maintenance.

Which engine types will the AER joint venture manage?

The joint venture will manage CFMI LEAP-1A and LEAP-1B engines, which are used in Airbus A320neo and Boeing 737 MAX aircraft.

How will this partnership benefit LEAP engine operators?

Operators will benefit from combined expertise of a global airline-MRO that operates new generation aircraft and engines, along with the experience of a world-class aircraft and engine lessor.

When will the AerCap and Air France KLM joint venture become operational?

The joint venture is currently in exclusive negotiations and subject to necessary approvals, with no specific operational date announced.

What is the existing relationship between AerCap and Air France KLM?

The companies already have an existing cooperation around lease engines, with AerCap noting satisfaction with AFI KLM E&M's service and support over the years.