Wells Fargo & Co. is launching an aircraft leasing company.

The nation's fourth-largest bank is forming a new joint venture with Irish aircraft leasing outfit Avolon as it stretches to grow new sources of revenue in the face of heightened regulation, rock-bottom interest rates and slow-as-molasses economic recovery.

The operation, Avolon Capital Partners Ltd., will be based in Dublin, where Avolon is based. It plans to build a $500 million fleet of about 10 aircraft, Avolon said this week. The new company will focus on young, fuel-efficient aircraft, both narrow and wide-body, through sale and lease-back transactions with airlines.

Don't look for a stagecoach painted on any jet tails. Wells Fargo, a majority shareholder in the new entity, will be providing banking and debt financing for the venture.

Financial details weren't disclosed. Regulatory approval is required in the European Union, Turkey, Brazil and China, Avolon said.

In an interview, Dave Hoyt, head of wholesale banking at Wells Fargo, characterized the venture as an "interesting opportunity" for the bank to "put our toe in the water."

The San Francisco-based lender, which has a major presence in Minnesota, is big in transportation equipment leasing, such as rail cars and trucks, and has been involved before in some aircraft leasing. But it hasn't had a big stake in the commercial aircraft leasing industry until now.

Hoyt said he sees the partnership as a natural evolution for the bank -- and a good opportunity.

The joint venture reflects a broader shift in the global airline industry, toward airlines renting their jets instead of buying. Plus, European banks, under pressure by regulators to clean up their balance sheets, have been pulling back on financing, opening doors for others.

Wells Fargo was an unsuccessful bidder last year for the aircraft leasing unit of Royal Bank of Scotland Group PLC.

Avolon is a major aircraft leasing company with a fleet of about 167 aircraft around the world and 45 employees. A relatively new player, it started in 2010 and has raised $3.7 billion in debt capital from a large group of banks, including Wells Fargo, and an additional $1.4 billion from other investors.

Avolon said Wells Fargo has been a significant lender to the aircraft firm since January 2011. "The joint venture is a natural evolution of our relationship," Avolon chief financial officer Andy Cronin said in a statement.

Jennifer Bjorhus • 612-673-4683