Guinness Peat Aviation (GPA) was an aircraft leasing company set up in 1975 by Aer Lingus, the Guinness Peat Group (a London-based financial services company) and Tony Ryan, then an Aer Lingus executive.
History
GPA was based in Shannon, Ireland. During the 1980s it became the world's largest commercial aircraft lessor and expanded its shareholding to include Air Canada, General Electric, Short Term Credit Bank of Japan and companies in the Mitsubishi group. GPA also had financing joint ventures with key aircraft manufactures, including Airbus, Fokker and McDonnell Douglas. At its peak, the company was valued at $4 B. Net income reached $265 M in the year to 31 March 1992.
Former Taoiseach Garret FitzGerald, former British chancellor of the exchequer Nigel Lawson, Peter Sutherland and the former Chairman of ICI, Sir John Harvey-Jones, were among GPA's non-executive directors. Lawson joined the board of GPA in February 1990 but he also became chairman of GPA Financial, a subsidiary company.
In 1990, GPA stunned the aviation world by placing a $20 billion order for new aircraft, at the time 10 per cent of the world's aircraft production. It was then making an annual profit of $280 million.
A new company, GPA Helicopters Ltd., was set up in June 1990 as a joint venture with CHC Helicopter to acquire, own and lease helicopters worldwide.
Downfall
The decision to float the company on the stock market in 1992, during an aviation industry downturn following the 1991 Gulf War, proved disastrous, as international financial institutions refused to buy shares. Unable to raise the capital it needed to continue its ambitious operations, the company plunged into crisis, with some $10 billion in debts.
The story of GPA's downfall is told by Christopher Brown, aviation lawyer and GPA Senior Vice-President, in his 2009 book Crash Landing – An Inside Account of the Fall of GPA. The book is a personal memoir of the history, background and run-in to the failed initial public offering (share flotation), GPA's subsequent financial collapse and later restructuring and involvement of GE Capital (GECAS). It is based on a contemporaneous diary of events kept by the author from 1990 to 1996 while employed by GPA and subsequently GECAS.
Restructuring
In a subsequent restructuring completed in November 1993, GPA avoided default on its debts by selling some of its aircraft to a subsidiary of General Electric, GE Capital Aviation Services (GECAS), which also took over the operational management of GPA's fleet and most of GPA's technical and marketing staff. GE Capital also acquired an option to purchase 90% of GPA's ordinary shares at a low price. GPA used the cash from this transaction to repay all its unsecured debt. Chairman and chief executive Tony Ryan transferred to GECAS. He was replaced by Patrick Blaney as chief executive and by Dennis Stevenson (later Lord Stevenson of Coddenham) as chairman.
GPA continued to own a substantial fleet and in March 1996 sold 229 aircraft for $4 B in what was at the time the second largest securitisation transaction ever. GPA used the cash from this sale to repay all of its secured debt and the company returned to profit in the year to 31 March 1996 with net income of $65 M.
GPA further consolidated its position in the years to 31 March 1997, 1998 and 1999, reporting net income of $108 M, $64 M and $47 M. In November 1998, Texas Pacific Group acquired 62% of the company's shares and GE Capital's 1993 option was replaced by one to acquire an interest of 23%. As part of this transaction, the name of the company was changed to AerFi Group plc.
In December 1999, AerFi acquired Indigo Aviation, a Swedish aircraft lessor, and by 31 March 2000 was managing a fleet of 104 aircraft and reporting a profit of $68 M.
In November 2000, AerFi was acquired by debis AirFinance, an affiliate of DaimlerChrysler AG, for $750 M. AerFi's fleet and staff were then merged into those of debis AirFinance.
In March 2005, debis AirFinance was acquired by Cerberus Capital and subsequently renamed AerCap.