It’s just a small order for five Boeing MAX 8s, but the announcement from lessor Griffin Global Asset Management has more substance to it. It is the first direct order for Griffin, which has bold ambitions to create “a world-class commercial aviation leasing and asset management platform.” With the help of a by now familiar name in the aviation and airline industry: Bain Capital. Griffin MAX order confirms growth strategy.
Griffin announced its order with Boeing on September 1. “As market conditions rebound, we are finding opportunities to serve our airline customers in innovative ways”, Ryan McKenna, founder, and CEO of Griffin says in a Boeing press statement. “An important component of this strategy is providing balanced capacity that meets returning passenger demand. The 737-8 is well-positioned to support this objective, and this order lays a strong foundation for more to come with Boeing and Griffin on future opportunities.” Griffin nor Boeing has disclosed details on potential customers or delivery schedules.
Griffin is not a new player in the aircraft financing market. In January, it refinanced two of Virgin Atlantic’s Boeing 787-9s as the airline was restructuring its debts. Only five days later on January 20, Griffin announced that it had formed a joint venture with Bain Capital Credit. Bain will provide the capital to acquire and lease the aircraft while Griffin will offer all lease management services.
The Dublin and Los Angeles-based lessor’s management team includes experts with a track record in the aircraft leasing business. President Marc Bear joined Griffin last year from Air Lease Corporation (ALC), where he was Executive Vice President Marketing. He started with ILFC in 1997. Vice Presidents Patricia Lynch and Eimear Konkoly have worked with GECAS and AerCap respectively. Senior Vice President Eric Hild and Vice President Michael Lombardi have worked with Boeing.
Bain Capital grows its airline and aerospace portfolio
Bain Capital Credit has an asset portfolio of $49 billion and is part of the private multi-asset investment firm Bain Capital, which has assets under management of $140 billion. Since last year, the investor has made some significant investments in the airline and aviation industry. In June 2020, it was selected as the preferred party to take over Virgin Australia which filed for voluntary administration two months earlier. Since then, Virgin Australia has emerged again and continues to rebuild its business.
This June, Bain Capital has taken a 16.6 percent share in Icelandair Group for $66.1 million. The airline is in need of fresh capital as it tries to get out of the Covid-crisis. For Bain, Icelandair is an interesting strategic investment.
Bain also has a majority investment in aerospace companies, like Japan’s Showa Aircraft that produces amongst others honeycomb panels for the aviation industry. Other investments include Precinmac Precision Machining, Air Comm Corporation, AEVEX Aerospace, and Titan Aviation.
Early August, Rolls-Royce confirmed that it was in exclusive negotiations with Bain Capital about selling its key component supplier ITP Aero. Only purchased four years ago, Rolls-Royce has been trying to divest ITP again as it restructures its civil aerospace business.
The recent agreements and announcements from Griffin and Bain Capital confirm that both companies are eager to expand their business within the airline and aerospace industry.