The aviation and political worlds collided this weekend when a commercial Ryanair flight was forcibly diverted from landing at its Vilnius, Lithuania destination by Belarus air force fighter jets to divert to Minsk where four Russian passengers were detained. The pilot of the Ryanair plane was told to land due to a bomb threat onboard. After landing however the Russian individuals were removed from the plane.
Speaking to Irish radio, Ryanair group CEO Michael O'Leary described the action as a case of “state-sponsored hijacking – state-sponsored piracy” that deserves a strong and clear response from the EU.
The Irish Taoiseach Micheál Martin has described the incident as “nonsense” and that it was clear this was a “state-sponsored coercive act” that was “totally unacceptable”.
ICAO voiced its concern shortly after the incident and said that the forced landing could be in contravention of the Chicago Convention – which established airspace rules.
The Belarus’ Investigative Committee said that it has opened a criminal case on charges of false bomb threat. Belarus’s foreign ministry spokesperson Anatoly Glaz said in a statement that there was “no doubt the actions of our competent authorities … fully met established international rules,” adding that the West was “politicising” the situation.
EU leaders are meeting today to discuss their response to the incident. Fresh sanctions on Belarus are being discussed alongside a ban on overflights of Belarus. Airlines are already avoiding the country as data from FlightRadar already shows.
In the aviation finance world, funds managed by private equity firm Stonepeak Infrastructure Partners, have partnered with Bellinger Asset Management to complete the acquisition of a US$1.1 billion performing aircraft loan portfolio from National Australia Bank.
The portfolio comprises 27 loan facilities secured by 159 aircraft having a collateral valuation of $1.4 billion. The weighted average remaining loan term of the portfolio is approximately 5.6 years and the underlying collateral comprises mostly new generation aircraft with a weighted average age of approximately 4.6 years.
The portfolio acquisition represents the first joint investment made by Stonepeak and Bellinger and the launch of a diversified, independent aviation platform, which it says will “seek to deploy capital opportunistically and strategically across the aviation sector”. Funds managed by Stonepeak have committed $500 million in further equity capital for future investment in partnership with Bellinger in the aviation platform. Stonepeak’s investment will be made through a combination of Stonepeak’s infrastructure-focused private equity and credit funds.
“We view aviation as a critical infrastructure sector and key industry within the firm’s broader transportation investment strategy,” said Luke Taylor, Senior Managing Director and Executive Committee Member of Stonepeak. “The portfolio acquisition is the culmination of several years of thematic sourcing efforts in the aviation sector and continues our successful track record of targeting investments backed by high quality real assets with strong contracted cash flows and downside protection. We are excited to have partnered with Bellinger on this transaction and to continue working with the senior team there to grow our investments in the sector.”
Jack Howell, Senior Managing Director and Executive Committee Member of Stonepeak, added, “Aviation has been a strategic area of focus for our credit business, and we expect to continue to pursue opportunistic capital deployments in the space.”
René Mansveld, Managing Partner of Bellinger, said, “This acquisition is consistent with our investment strategy in aviation and our history of investing up and down the capital structure at different points of the economic cycle. At a time of significant disruption in the global aviation industry, the acquisition provides us with exposure to a portfolio of high quality, senior ranking loan assets secured by young, new generation aircraft and a diversified group of borrowers comprising investment grade lessors and major North American and state-owned or supported airlines. We are delighted to have partnered with the experienced and respected team at Stonepeak to complete this transaction.”
Allen & Overy served as legal advisor on the transaction. Deutsche Bank served as financial advisor on the transaction.