Macquarie's aviation affiliate to buy 23 aircraft from Kuwait's ALAFCO for $1.1 billion

(Reuters) -Australian financial conglomerate Macquarie's aircraft leasing affiliate on Friday said that it will buy an additional 23 aircraft from Kuwait-based ALAFCO Aviation Lease and Finance for $1.1 billion.

The deal comes as airlines are leasing more planes in a bid to tap into the rising spending power of travellers in Asia, the world's fastest-growing aviation market, with lessors also attracted to the sector's strong returns.

Macquarie AirFinance's purchase consists predominantly of new technology commercial passenger aircraft with an average age of approximately five years, it said in a statement.

The deal adds to the company's existing agreement with ALAFCO to acquire 53 aircraft, along with an order book of 20 Boeing 737 Max for about $2.2 billion.

Following this deal, Macquarie AirFinance's portfolio will include 240 aircraft leased to 87 airlines across 47 countries.

"The acquisition of the further 23 aircraft will help facilitate the transition of Macquarie AirFinance’s fleet to newer technology, with the addition of more fuel-efficient models to lower the average carbon emissions intensity," it said.

"The aviation sector’s strong recovery has continued, with domestic and international travel rebounding from pandemic lows in key markets," said Macquarie AirFinance CEO Eamonn Bane.

The sale of the additional 23 aircraft also means the Kuwait-based firm will have sold all its aircraft.

"ALAFCO’s board of directors intend to explore alternatives for the future of its global aviation business after completing all the procedures for selling the remaining aircraft in the company portfolio," CEO Adel Albanwan said.

Macquarie AirFinance was established in 2006 following the acquisition of 87 aircraft from railcar lessor GATX, with Macquarie Group taking a 35% interest in the newly-formed business.

(Reporting by Rishav Chatterjee in Bengaluru; Editing by Varun H K)