Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
The Abu Dhabi Investment Authority (ADIA) has joined a joint venture to establish Constellation Aviation, a new aircraft leasing and infrastructure investment platform.
Avolon, a leading global aviation finance company, and I Squared Capital, a global infrastructure investor, are partners in the joint venture, which will initially acquire a portfolio of aircraft from Avolon with a current market value of $1.4 billion.
The initial portfolio comprises 22 modern, fuel-efficient aircraft with an average age of approximately five years, currently leased to 17 airlines across 15 countries, according to a statement issued by Avolon.
The platform has ambitions to expand its aircraft portfolio to $6 billion, Reuters reported, citing a source familiar with the venture.
The joint venture will bring together long-term institutional capital from ADIA and I Squared Capital with Avolon’s expertise in aircraft leasing, asset management and servicing, the statement said.
ADIA is participating through a wholly owned subsidiary, while Avolon will retain a minority equity interest in Constellation Aviation and serve as its exclusive aircraft manager and servicer.
The platform is designed to provide airlines with access to aircraft capacity while offering investors exposure to long-term contracted cash flows generated by aircraft leasing.
Khadem AlRemeithi, Executive Director of the Infrastructure Department at ADIA, said the investment reflects the long-term prospects of the aircraft leasing industry.
“Aircraft leasing is a resilient and growing sector supported by strong structural demand for modern aircraft. The Constellation platform brings together two like-minded investors with one of the world’s leading operators to meet that demand,” AlRemeithi said.
Avolon said Constellation is expected to expand over time, benefiting from continued growth in global passenger demand, constraints on aircraft manufacturing capacity and the increasing reliance of airlines on leasing to finance fleet expansion and renewal.
The company said aircraft manufacturers’ order books now extend a decade or more into the future, increasing the importance of leasing companies with established aircraft delivery commitments.
Gautam Bhandari, Co-Founder, Managing Partner and Global Chief Investment Officer of I Squared Capital, said Avolon’s substantial aircraft orders with Boeing and Airbus provided the joint venture with an important advantage.
“Partnering with Avolon gives Constellation immediate access to a modern aircraft portfolio and a proven origination and servicing platform,” Bhandari said.
“Together with ADIA, we look forward to building Constellation into a leading aviation infrastructure leasing platform.”
Ross O’Connor, Chief Financial Officer of Avolon, said the joint venture would expand the company’s aircraft asset management business.
“The joint venture will combine long-term institutional capital with Avolon’s leasing, servicing and asset management expertise,” O’Connor said.
“Constellation will expand our asset management business and reflects the confidence leading institutional investors place in aviation and Avolon’s ability to originate, manage and service high-quality assets.”
Avolon is one of the world’s largest aircraft leasing companies, with an owned, managed and committed fleet of 1,092 aircraft as of September 30, 2026. The company works with 138 airlines in 62 countries.
According to Reuters, Avolon, a subsidiary of China’s Bohai Leasing, recently placed its largest aircraft order, taking its total aircraft order book to 749, in addition to 561 aircraft it currently owns.
I Squared Capital, headquartered in Miami, manages more than $60 billion in assets and has investments across transportation, logistics, energy, digital infrastructure and other infrastructure sectors. Its portfolio includes more than 100 companies operating in over 70 countries.
The Constellation Aviation transaction is expected to close following the receipt of necessary regulatory approvals.
