(Adds comment from interview pension fund CEO)
By Allison Lampert
MONTREAL, June 19 (Reuters) - Caisse de depot et placement du Quebec's chief executive said on Monday his Canadian fund's $2 billion investment with GE Capital Aviation in a new aircraft leasing entity could increase over time.
Quebec's largest pension fund is putting up 90 percent of the equity for the entity, which will be operated by the commercial aircraft financing and leasing business of GE. GE.N
"This platform, at $2 billion today, has the potential over time to be meaningfully larger than $2 billion," Caisse Chief Executive Michael Sabia said in a phone interview.
The new entity will focus on the market for high-tech, fuel-efficient narrow-bodies, he said. GE Capital Aviation Services, or GECAS, already owns or services a fleet of over 1,950 aircraft.
Sabia said the entity, to be called Einn Volant Aircraft Leasing, or EVAL, was looking at fuel-efficient narrow-bodies, or single-aisle planes, because those planes "move most quickly and most easily among the airlines of the world."
That market includes Airbus's AIR.PA A320neo and Boeing (NYSE:BA) Co's BA.N 737 MAX, along with Canadian plane-and-train-maker Bombardier Inc's BBDb.TO CSeries. Any decision about the financing of a specific aircraft would be a function of airline demand, Sabia said.
He added that the Caisse's 30 percent stake in Bombardier's rail division was "completely separate" from the pension fund's $2 billion investment over four years in the entity with GE.
"The focus of this platform is working with airlines," Sabia said. "Our openness to financing specific aircraft has everything to do with what the airlines buy."