ILFC Reportedly Weighing Purchase of Daimler Unit

DaimlerChrysler, which is suffering losses in truck- and car-making, has put its aircraft leasing unit up for sale to raise cash, sources familiar with the situation said.

Los Angeles-based International Lease Finance Corp., the biggest aircraft lessor, is considering a purchase of Debis AirFinance, the sources said, and Goldman Sachs Group is the banker working with DaimlerChrysler. The unit is the world’s fourth-largest, with 2000 revenue of $179 million and after-tax profit of $68 million.

Daimler is seeking to dispose of Debis AirFinance just seven months after it expanded the unit with the $750-million purchase of AerFi Group of Ireland. With AerFi, AirFinance had a $5-billion portfolio of 222 airliners owned or under management.

“DaimlerChrysler is clearly looking to sell some assets to strengthen its balance sheet,” said Doug McVitie, managing director of Arran Aerospace, a forecasting company in Scotland. “This is a good one to sell because aircraft leasing is a profitable business.”

DaimlerChrysler spokesman Thomas Froehlich said the company had no comment.

Meanwhile, International Lease ordered 111 planes valued at $9.4 billion from Airbus Industrie. International Lease is expanding its fleet even as the U.S. economy slows and air travel declines in many regions.

International Lease, which leases aircraft to airlines, agreed to buy 10 of the plane maker’s 550-seat A-380s as well as 80 of the smaller A-320s and 21 of the A-330s, the companies said at the Paris Air Show. International Lease is a unit of insurer American International Group Inc.

The planes International Lease is buying “don’t necessarily have customers,” said Richard Aboulafia, director of aircraft consulting at Teal Group in Fairfax, Va. “If an economic downturn is prolonged, these are the sort of deliveries that are more subject to change.”