Private Credit Firm BC Partners Seizes Lucrative Opportunities in Airplane Shortage

As delays in new aircraft deliveries and tariff-related cost increase for US-built jets continue, airlines globally have amplified their efforts to acquire secondhand planes. Within this vortex of uncertainty, a lucrative opportunity has emerged for some players. BC Partners, a London-based private fund manager, is one such firm cashing in on the crisis. Through the strategic acquisition and sale of secondhand jets, BC Partners has managed to secure a tidy profit while diversifying its asset portfolio.

The firm, led by Ted Goldthorpe, recently procured two midlife Airbus A320-200 passenger jets for $40 million and swiftly sold them back to a Middle Eastern airline for $52 million. This quick-play deal, completed in 60 days, resulted in a substantial 1.3 times gain, marking a boom for their private credit business.

State-backed airlines in the Middle East and Asia are increasing their purchases of midlife aircraft with their strong balance sheets, looking to fortify their fleets amid delays in new aircraft production and future cost uncertainties for US-manufactured planes. BC Partners has been able to expand its deal pipeline within such a market climate, when deal activity in the direct lending market has faltered.

The aviation portfolio of BC Partners, including current holdings and potential deals, serves them well, standing at a valuation between $1.5 billion and $2 billion. Looking ahead, BC Partners has set its sights on airplanes manufactured by Boeing or Airbus, prioritising models with engines from Pratt & Whitney, GE and Rolls-Royce. Their acquisition strategy targets planes coming from lessees who need to cut their exposure to specific aircraft types or retail investors seeking to reduce their aircraft holdings. BC Partners has evidently charted their course in the skies of profit, ready to navigate through turbulence to secure favourable outcomes.