Saudi Arabia Advances Aircraft Leasing with AviLease Hassana Partnership

Saudi Arabia’s Aviation Ambitions Take Flight: AviLease and Hassana Investment Company Form Strategic Partnership in Aircraft Leasing

Saudi Arabia’s ambitious Vision 2030 plan aims to diversify its economy and establish the Kingdom as a leading global hub for aviation. In a significant step toward this goal, AviLease, a Public Investment Fund (PIF)-backed aircraft lessor, and Hassana Investment Company, one of the world’s largest pension fund managers, have announced a strategic partnership in aircraft leasing. This joint venture marks a foundational shift, introducing institutional Saudi capital into the aircraft leasing market and supporting the nation’s National Aviation Strategy.

The partnership is not only a milestone for Saudi Arabia’s private sector but also signals the Kingdom’s intent to develop a scalable, sector-focused platform that can attract both domestic and international investors. As the aviation sector undergoes transformation, the collaboration between AviLease and Hassana will likely shape the future of aircraft financing and leasing in the region, aligning closely with Saudi Arabia’s broader economic development and Sustainability objectives.

This article examines the structure, motivations, and broader implications of the AviLease-Hassana partnership, providing context on each company, the evolving Saudi aviation sector, and the global aircraft leasing market. We also explore the potential long-term impacts and future outlook for this landmark joint venture.

The Strategic Partnership Framework

The joint venture between Hassana Investment Company and AviLease is designed to leverage the strengths of each partner. Hassana, as the majority stakeholder, brings substantial long-term capital, while AviLease contributes its technical, operational, and industry expertise as the service provider for the new platform. This structure distributes risk and operational responsibilities in a way that is consistent with best practices in institutional investment and asset management.

The partnership’s initial transaction involves the acquisition of a portfolio of 10 modern, fuel-efficient aircraft from AviLease, all leased to Saudi-based airlines. This move not only provides immediate cash flow but also demonstrates a commitment to sustainability and operational efficiency, key trends in the global aviation industry. By focusing on new-technology aircraft, the joint venture aligns with both environmental targets and the commercial needs of Saudi airlines.

Importantly, the venture aims to democratize access to aviation finance for both local and international investors. Traditionally, aircraft leasing has been dominated by a handful of global players with significant expertise and networks. The AviLease-Hassana partnership seeks to open this asset class to a broader base, offering exposure to resilient, long-term cash flows supported by robust sector fundamentals.

“This strategic partnership underscores our commitment to investing in resilient assets that generate sustainable, long-term cash flows supported by strong fundamentals.” — Hani Aljehani, Acting CEO and Chief Investment Officer, Hassana Investment Company

The timing of the partnership coincides with Saudi Arabia’s push to expand its aviation sector, accommodate more passengers, and enhance connectivity as part of Vision 2030. The alignment of institutional capital with sector-focused operational expertise is expected to accelerate progress toward these national goals.

AviLease: A New Force in Aircraft Leasing

Established in 2022 as a subsidiary of Saudi Arabia’s Public Investment Fund, AviLease has rapidly positioned itself as a significant player in the global aircraft leasing market. The company’s mission is to provide tailored fleet solutions to airlines through leasing, trading, and asset management services. AviLease’s growth strategy is multifaceted, including purchase-and-lease-back deals, portfolio acquisitions, direct manufacturer orders, and potential corporate acquisitions.

AviLease’s leadership team features industry veterans with extensive experience at leading global lessors. This expertise has been instrumental in the company’s swift ascent, allowing it to build a diversified portfolio of both narrow-body and wide-body aircraft. The acquisition of Standard Chartered’s aircraft leasing platform was a pivotal moment, adding approximately 120 aircraft to AviLease’s portfolio and expanding its service offering to include jet fuel hedging, debt financing, and remarketing.

In April 2024, AviLease secured a $1.5 billion financing facility and received investment-grade ratings, reflecting strong market confidence in its business model and management. The company is targeting a fleet of around 200 aircraft, which would position it among the world’s leading lessors. AviLease’s international ambitions are clear, with a strategy that extends beyond the domestic Saudi market to global opportunities.

“AviLease’s disciplined investment and operational approach, backed by the PIF, is reshaping the competitive landscape for aircraft leasing in the Middle East and beyond.”

Hassana Investment Company: Institutional Strength and Long-Term Vision

Hassana Investment Company manages over SAR 1.2 trillion (approximately USD 320 billion) in assets, making it one of the ten largest pension fund managers globally. As the investment arm of the General Organization for Social Insurance, Hassana has a mandate to secure retirement pensions for future Saudi generations. This long-term focus naturally aligns with investments in infrastructure and real assets, such as aircraft leasing, which offer stable, predictable cash flows.

Hassana’s investment strategy is diversified, with significant allocations to fixed income, public equity, real estate, infrastructure, private equity, and alternative assets. The company balances regional investments managed directly with international opportunities pursued through partnerships with leading global asset managers. Recent memoranda of understanding with firms like Warburg Pincus and Franklin Templeton reflect Hassana’s commitment to both domestic development and global diversification.

Governance at Hassana adheres to international best practices, with a board that includes former executives from top global pension funds. This ensures robust oversight and strategic alignment with both fiduciary responsibilities and national development objectives. Hassana’s role in the joint venture is not only to provide capital but also to bring institutional discipline and risk management to the rapidly evolving Saudi aviation sector.

“Our scale and expertise enable us to pursue opportunities that align with our mission, generating sustainable returns for the benefit of Saudi society.”

Saudi Arabia’s Aviation Sector Transformation

Saudi Arabia’s aviation sector is undergoing a dramatic transformation as part of the Kingdom’s Vision 2030 economic diversification agenda. The National Aviation Strategy targets a tripling of annual passenger capacity to 330 million and aims to connect the Kingdom to over 250 destinations by 2030. Achieving these goals requires massive investment in fleet expansion, airport infrastructure, and operational capabilities.

The strategy encompasses network development, airline expansion, airport upgrades, aviation services, and innovative funding mechanisms. The estimated capital expenditure to realize these ambitions is SAR 365 billion, making it one of the largest sectoral investments in the Kingdom’s history. Aviation’s economic impact is already substantial, contributing $90.6 billion to Saudi GDP in 2023 and supporting 1.4 million jobs, according to the International Air Transport Association.

Airline capacity is being expanded through the launch of new carriers like Riyadh Air and significant fleet Orders from established players such as Saudia Group. Infrastructure projects, including new and upgraded Airports, are underway across the Kingdom. The Red Sea Airport, for example, has been recognized as the region’s first carbon-neutral airport, highlighting the integration of sustainability into the sector’s growth plans.

“Saudi Arabia’s aviation sector is a cornerstone of Vision 2030, driving both economic diversification and global connectivity.”

Global Aircraft Leasing Market Dynamics

The global aircraft leasing market is valued between $183 billion and $192 billion in 2024, with annual growth projections of 8–11% through 2034. This robust expansion is driven by airlines’ increasing preference for leasing over ownership, which offers operational flexibility and access to modern, fuel-efficient fleets without significant upfront capital outlays.

Operating leases now account for over half of global aircraft financing, reflecting a shift toward asset-light business models in the airline industry. Market concentration among lessors has increased, with the largest firms managing portfolios worth tens of billions of dollars. This trend has created opportunities for new entrants like AviLease, especially those with strong institutional backing.

Regional dynamics show that the Middle East’s aviation sector has grown faster than the global average, yet leasing penetration, especially for single-aisle aircraft, remains below the global norm. As Saudi airlines expand, the demand for leasing solutions is expected to increase, providing a fertile environment for the Hassana-AviLease partnership. Technological innovation, such as AI-driven portfolio management and predictive maintenance, is also reshaping the industry.

“Aircraft leasing is now the backbone of airline fleet strategies worldwide, offering flexibility and financial efficiency in a volatile market.”

Financial Structure and Strategic Implications

The joint venture’s financial structure is tailored to optimize risk and return for both partners. Hassana’s majority stake ensures access to long-term capital, while AviLease’s operational role provides the technical expertise necessary for success in this specialized market. The initial focus on Saudi-based airlines allows the venture to build experience and credibility before potentially expanding into international markets.

The partnership is well-positioned to support Saudi Arabia’s ambitious aviation growth targets by providing tailored financing solutions to airlines and capturing more value within the Kingdom. It also sets a precedent for institutional investors to play a more active role in strategic sectors, reducing reliance on foreign capital and expertise.

Risk management is central to the venture’s approach, with a portfolio focused on new, fuel-efficient aircraft that align with both market demand and regulatory trends. The structure allows for gradual expansion, leveraging the strengths of both partners while maintaining flexibility to adapt to changing market conditions.

“The combination of institutional capital and sector expertise is a model for sustainable growth in capital-intensive industries like aviation.”

Conclusion

The strategic Partnerships between Hassana Investment Company and AviLease is a landmark development for Saudi Arabia’s aviation sector and the broader aircraft leasing industry. By combining institutional capital with operational expertise, the joint venture is poised to support the Kingdom’s aviation ambitions while generating sustainable, long-term returns for pension beneficiaries.

As Saudi Arabia continues to invest in its aviation infrastructure and fleet, the Hassana-AviLease partnership serves as a model for public-private collaboration and sector-focused investment. The venture’s success could influence similar initiatives in other strategic sectors, reinforcing the Kingdom’s position as a global economic and aviation leader.

FAQ

What is the main goal of the AviLease-Hassana partnership?
The primary goal is to create a scalable aircraft leasing platform that supports the growth of Saudi Arabia’s aviation sector while providing access to aviation finance for both local and international investors.

Who are the main stakeholders in the joint venture?
Hassana Investment Company holds the majority stake and provides the capital, while AviLease serves as the aircraft service provider, offering operational and technical expertise.

How does this partnership align with Vision 2030?
The partnership supports Vision 2030 by fostering economic diversification, building domestic capabilities in aviation finance, and supporting the Kingdom’s goal to become a leading global aviation hub.

What types of aircraft are included in the initial transaction?
The initial portfolio consists of 10 modern, fuel-efficient aircraft leased to Saudi-based airlines, reflecting a commitment to sustainability and operational efficiency.

How significant is Saudi Arabia’s aviation sector to the national economy?
Aviation contributed $90.6 billion to Saudi GDP in 2023 and supported 1.4 million jobs, highlighting its role as both an economic engine and an enabler of broader growth.

Sources:
AviLease