Air Transport World

The veil is lifted; thanks to a new public debt offering, industry observers get a revealing look at GPA Group. (Company Profile)

The world's largest operating-lease company actually derives a much larger share of revenues and income from the sale of jet-transport aircraft than it does from its core business of leasing airplanes to the world's airlines. This surprising bit of information is disclosed in a prospectus issued by Shannon, Ireland-based GPA Group to support a public offering of $500 million in 6 1/2-year unsecured notes. It is the group's issue (ATW, 12/91).

For followers of GPA, the prospectus offers the first clear look into the workings of the hugely successful but mysterious company. Although it reveals a sophisticated and highly diversified venture, it also shows that GPA is not immune from the turmoil roiling the entire industry, that it faces massive capital requirements to meet its aggressivte expansion program and that finding customers for all of its aircraft on order is a major challenge.

The prospectus also discloses that GPA Group executive chairman, visionary and cofounder T.A. Ryan, 55, has reduced his day-to-day involvement in the company and will continue on in a Iess-than-full-time basis" when his current employment contract expires in three years.

Likewise No. 2 Vice Chairman and Group President Maurice Foley, 52, has reduced his day-to-day involvement, although to a lesser extent, and will cut back even more when his contract expires in 10 months.

Proceeds from the $500 million unsecured offering will be used to provide working capital to support an order book valued at $11 billion, including $2.5 billion in aircraft scheduled to arrive this year for onward lease to airlines.

But as GPA reveals, leasing plays but a supporting role in the company's overall business activity, contributing only 30% of revenues and 31% of gross profits in the fiscal year ended March 31 (see table). …

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