Aviation PLC has announced it has entered into 10-year loan facility agreements for up to US $152.2 million under a mandate to Crédit Agricole-Corporate Investment Bank. The loan facilities can be drawn down progressively by the Company on an aircraft by aircraft basis for the purpose of purchasing a fleet of eight new ATR72 Aircraft for operation in Australia. The first of these aircraft, an ATR72-500, has been financed and was delivered new on August 11, 2011. The loan facilities, with respect to the first four aircraft, are credit insured by the French and Italian export credit agencies. This is the first ATR aircraft ever to be financed under the new 2011 Aircraft Sector Understanding on Export Credits for Civil Aviation. The loan facilities are at a fixed interest rate cost of approximately 5% per annum.
The first aircraft and subsequent aircraft are being leased to Australian carrier Skywest Airlines, who operate the aircraft on behalf of Virgin Australia, under the Virgin Australia brand, pursuant to 10-year wet-leases. The operation of the aircraft constitute a part of the Australian Regional Airline Network Agreement (ARAN) between Skywest Airlines and Virgin Australia under which the parties agreed that Skywest Airlines will operate up to 18 new aircraft on behalf of Virgin Australia. Initially the first routes serviced will include those of Brisbane to Gladstone, Port Macquarie and also from Sydney to Canberra.