Bonderman a frequent aviation investor
By Doug Cameron in Chicago

Published: November 22 2006 05:42 | Last updated: November 22 2006 05:42

David Bonderman, the founding partner of Texas Pacific Group, has never shirked from opportunistic interest in the airline industry, highlighted by an audacious if unsuccessful effort to join a union-backed bid for Boeing’s commercial aircraft business in 2003.

The Texas-based businessman has proved an astute observer of the airline sector through a series of deals including the rescue of America West and Continental Airlines, and his identification of the potential now stamped on the European market by Ryanair, the fast-growing Irish carrier he now chairs.

However, TPG’s interest comes amid signs that private equity groups are losing interest in the sector targeted because of strong profit growth outside the US and a shortage of aircraft that had prompted interest in leasing companies.

Mr Bonderman’s influence in the industry was reflected in an address last June to the International Air Transport Association. “It’s time to sell, ladies and gentleman,” he told his audience in Paris. “This is as good as it gets in the airline industry and it’s only going to get worse.”

He suggested there were limited opportunities in an industry which saw record orders last year, driven by rising demand from carriers in the Middle East and Asia, notably India and China. The peak, he said, had been reached.

Such “opportunities” included investment in Tiger Airways, a low-cost offshoot of Singapore Airlines backed by Indigo Partners, an investment vehicle including Mr Bonderman, Bill Franke, a former head of America West, and Tony Ryan, Ryanair’s founder.

Mr Bonderman also has interest in groups with investments in IndiGo, an Indian start-up with orders for 100 aircraft and, alongside Mr Franke, the Hungarian-Polish low-cost operator Wizz Air.

Over the years, TPG has also made opportunistic efforts to acquire stakes in other flag carriers, including South African Airways, and was also instrumental in the rescue of GPA, the Irish aircraft lessor which ultimately formed the basis for the expansion of General Electric’s Gecas unit, the global industry leader.

Copyright The Financial Times Limited 2006