UPDATE 2-Quebec fund CEO: $2 bln investment in new GE aircraft unit may grow
(Recasts; adds comments from interview, analyst, industry
By Allison LampertMONTREAL, June 19 (Reuters) - Caisse de Depot et Placement
du Quebec's [CDPDA.UL] chief executive said on Monday the
Canadian fund's $2 billion investment with GE Capital Aviation
in a new aircraft leasing entity could increase over time.
Canada's second largest pension fund is putting up 90
percent of the equity, along with the debt for the entity, which
will be operated by the commercial aircraft financing and
leasing business of General Electric Co <GE.N>
"This platform, at $2 billion today, has the potential over
time to be meaningfully larger than $2 billion," Caisse Chief
Executive Michael Sabia said in a phone interview.
The new entity will focus on the market for high-tech,
fuel-efficient narrow-body aircraft, he said. GE Capital
Aviation Services (GECAS), which is putting up the remaining 10
percent in equity, is one of the world largest aircraft-leasing
"One of the reasons that this transaction has come together
is that GE is looking for capital-efficient ways for them to
grow their business," Sabia said. "We're providing capital to
help them grow and they're providing operating capability to
make sure these assets are well-managed."
Sabia said the entity, to be called Einn Volant Aircraft
Leasing (EVAL), was looking at fuel-efficient, narrow-body or
single-aisle planes, because those planes "move most quickly and
most easily among the airlines of the world."
That market includes Airbus's <AIR.PA> A320neo and Boeing
Co's <BA.N> 737 MAX, along with Canadian plane-and-train-maker
Bombardier Inc's <BBDb.TO> CSeries.
He added that the Caisse's 30 percent stake in Bombardier's
rail division was "completely separate" from the pension fund's
$2 billion investment over four years with GE.
One aviation financing industry watcher said it is unlikely
that GE Capital Aviation would be interested in the 110- to
130-seat CSeries, since it uses the engine of GE rival Pratt &
Whitney, a unit of United Technologies <UTX.N>.
Sabia, however, said any decision about the financing of a
specific aircraft would be a function of airline demand.
"The focus of this platform is working with airlines," Sabia
said. "Our openness to financing specific aircraft has
everything to do with what the airlines buy."
A Bombardier spokesman could not be reached for comment.
Shares of Bombardier closed up nearly 5 percent on Monday in
Toronto trading. Qatar Airways CEO Akbar Al Baker earlier in the
day said he was considering the CSeries for a possible new
carrier in India.
The CSeries has not secured a new firm order in about a
(Reporting by Allison Lampert; editing by Chris Reese and G
((Allison.Lampert@thomsonreuters.com; +1-514-796-4212; Reuters
Keywords: CAISSE DEPOT QC GE/AVIATION (UPDATE 2)