Private equity firm KKR has disclosed a $1.4 billion investment in aircraft leasing with partner Altavair, as persistent supply shortfalls at Airbus and Boeing keep plane availability tight.

Aircraft Leasing on the Rise

Leasing companies and private equity firms have been playing a bigger role in funding aircraft purchases as airlines face rising costs and recovering travel demand amid limited aircraft supply. Airlines now lease – or rent – rather than own about half of the global fleet, with KKR having invested more than $12 billion in aviation since 2015.

Altavair focuses on acquiring new and used commercial aircraft and leasing them to passenger and cargo airlines worldwide. Most of the capital is still free to be allocated, which will happen over the next four years, a person close to the transaction said.

KKR plans to source aircraft directly from airlines seeking to free up cash, as well as from manufacturers such as Airbus and Boeing and through secondary market transactions. These deals typically involve buying aircraft and leasing them back to carriers under multi-year contracts, allowing airlines to raise cash while continuing to operate their fleets.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.