michael mooney - ceo of regional aircraft lessor

CEO of ACIA Aero Leasing, Michael Mooney

Leading regional aircraft lessor, ACIA Aero Leasing celebrates its 20th anniversary, with over two decades of industry expertise and growth. We have the questions, Michael Mooney, the CEO of ACIA Aero Leasing, has the answers.

This article was published in the October/November edition of LARA.

You’re celebrating your 20th anniversary this year. What does that mean for the business?

Twenty years is a major milestone for any business, but particularly in aircraft leasing. There aren’t many lessors in business trading for that length of time, especially with the same owners.

During this time, we have focused purely on regional aircraft leasing. This longevity of focus and knowledge has made us one of the leaders in the sector today.

We started out with a small portfolio of Beechcraft 1900 turboprops, leased to an operator in South Africa, and over time have sustainably and methodically built the portfolio to almost 70 aircraft – now on lease to over 20 customers from every continent.

What are ACIA Aero Leasing’s plans for the future?

Over the next five years, we will continue to be opportunistic in our investments and seek opportunities to grow. Every company wants to grow.

However for us, each deal is scrutinised heavily to ensure it meets and exceeds our investment hurdles. The environment for the investment also has to be right. Today, the aviation environment is very strong for lessors and we see a significant acquisition pipeline to allow us to grow over the next 12 to 18 months.

If opportunities continue to present themselves, we think our portfolio could grow to 90 to 100 aircraft in the next five years.

How do you see the markets for dry lease?

Our portfolio is split into three distinct segments: ACMI/Long Term Contracts operators for Oil & Gas/Humanitarian contracts; Scheduled/Charter Passenger airlines; and cargo operators.

Currently, we’re seeing strong demand for aircraft across all of these segments and expect that to continue for at least the next two years. However, what’s key for us is that we build our portfolio for the downside and not the upside, which we’re experiencing today. Diversification of lessees across these segments allowed our business to thrive during the Covid pandemic.

We were lucky. Instead of negotiating rent deferrals and reductions with Scheduled Airline customers, we took aircraft back from them and helped transition them to the ACMI operators, who were seeing a significant increase in demand as scheduled services paused.

What is your attitude to cargo aircraft?

Some lessors convert aircraft they own to freighters because they can’t place them as a passenger aircraft any longer – be they too old, too high cycle, etc. We think about cargo aircraft differently. We purposely acquire ATR aircraft to convert them to freighters because we see stable and long-term demand for the type.

Our sister company, IPR Conversions, owns the STC for the Passenger to Freighter (P2F) conversion on the ATR, which gives us a significant advantage in this segment. We have held the STC since 2016 (from Leonardo), and to date have completed on 20 cargo variants. From our perspective, we see leasing demand for four to eight ATR 72 freighters each year. Over the last three years, we have bought and converted around this number of aircraft each year. We expect our conversion rate to continue at this level.

What about other aircraft types?

We’re also keeping a close eye on the De Havilland Dash 8-400 and Embraer P2F conversion programmes. We anticipate some demand for these aircraft types, particularly among existing operators. On the passenger aircraft side, we currently have five Embraer aircraft in our portfolio. I do think there will be opportunities to grow this number in the next 12 to 18 months, and we’re targeting two to three specific regional aircraft right now for some of our existing customers.

While keeping focused on current aircraft types, we also closely follow the next-generation models shaping up in the regional aircraft arena, including ATR’s own hybrid/electric aspirations.

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LARA magazine with 5 question feature on regional aircraft lessor, ACIA Aero Leasing