Russian, Saudi wealth funds and German investment group create an aircraft leasing company for Russia

ROAL It is unclear which aircraft models – Russian-built or western types – ROAL is planning to acquire (ATO.ru)

A consortium of investors, including Russian, Saudi wealth funds and German investment KGAL group, has announced the creation of an aircraft leasing company for Russian airlines — ROAL.

A consortium of investors, including Russia’s sovereign wealth fund, a Saudi Arabian sovereign wealth fund and German independent investment and asset manager KGAL Group, has announced the creation of an aircraft leasing company for Russian airlines.

Russian Direct Investment Fund (RDIF), Public Investment Fund (PIF) and KGAL GmbH & Co., have announced the creation of ROAL – a company strategically focused on becoming “a leader in aircraft leasing in Russia.”

The announcement was made today, October 14, during Russian President Vladimir Putin’s attendance at the Saudi-Russian investment forum in Riyadh.

With the total investment expected to exceed US$600 million, “the purpose of the project is to invest in modern civil aircraft to be provided to Russian carriers under long term lease agreements,” an RDIF statement says.

“We expect the company to take a leading position in the Russian airline market. It will enable Russian carriers to expand their fleets on favourable terms and, accordingly, increase the number of routes they offer, which will create additional benefits for passengers,” notes Kirill Dmitriev, chief executive of Russian Direct Investment Fund.

The fund has declined to specify which aircraft models – Russian-built or western types – ROAL is planning to acquire.

Currently there are several large Russian companies involved in aircraft financing in the market. Most notable among them are the State Transport Leasing Company (GTLK), Sberbank Leasing, VTB Leasing, VEB Leasing and Avia Capital Services, which is a subsidiary of Rostec.

Among the partners of the newly created ROAL company is KGAL, a German business which currently has two joint ventures with Deutsche Lufthansa: Lufthansa Leasing and GOAL (German Operating Aircraft Leasing). Lufthansa Leasing was founded in 1989 and provides structured financing for aircraft owned by Lufthansa and its subsidiaries. Overall, the company has put together more than 600 aircraft transactions for the Lufthansa Group, with a total value of more than Euro 15 billion.

GOAL was founded in 1998 as a joint venture between KGAL (60 per cent) and Deutsche Lufthansa (40), and has since concluded transactions for more than 250 aircraft and engines. As of April 2018, its managed portfolio comprises 65 aircraft with an investment value of US$1.9 billion, making GOAL one of the top 50 lessors worldwide.

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