Finnair has entered into a sale-leaseback agreement for four currently operating Airbus A350-900s with GECAS and Gilead Aviation, the joint venture between GECAS and Pacific Investment Management Company (PIMCO). The arrangement includes in-service aircraft, with three being purchased by GECAS and one by Gilead Aviation.
The transaction forms part of Finnair’s refinancing plan. The operating lease period is, on average, 12 years. The arrangement will not have a significant impact on Finnair’s operating result for the third quarter of 2021; however, the immediate positive cash effect for Finnair is in excess of $400 million. Finnair will use the cash to refinance existing debt and retire its undrawn revolving credit facility of €175 million.
“This is the biggest single aircraft financing transaction in the history of our company”, says Finnair’s CFO Mika Stirkkinen. “It is a significant part of our refinancing plan, which we have executed diligently during the pandemic, and it helps us to further improve our capital structure.”
Finnair was the third airline to ever operate Airbus’ A350-900, taking delivery in October 2015 through a PLB of the aircraft with GECAS. Finnair has ordered a total of 19 new A350-900 XWB aircraft from Airbus, of which 16 have been delivered. The remaining three A350 aircraft are expected to be delivered in the second quarter of 2022, the fourth quarter of 2024 and the first quarter of 2025.
“We have found the A350 to be a great complement to Finnair’s fleet, providing a comfortable and reliable experience for our long-distance travelers,” Christine Rovelli, Finnair’s SVP Finance and Fleet Management, said, adding “Likewise, we have found GECAS to be a reliable and valuable source to support our fleet requirements.”
“GECAS is extremely grateful for the decades-long relationship we’ve shared with Finnair. We’re proud to be able to support such an outstanding operator with a range of customized solutions and arranging financing on their aircraft both pre- and post-delivery,” shared Alan Buckley, GECAS’ SVP & Region Manager.
LCI returns to fixed wing leasing market with A330 acquisition
LCI has re-entered the fixed wing market with the acquisition of an Airbus A330-300 commercial aircraft.
This latest investment programme builds upon LCI’s 17-year track record in the fixed wing market during which it has carried out more than 120 passenger and freighter aircraft transactions worth over US$7 billion.
LCI’s long-held fixed wing strategy of undertaking aircraft investments timed with market cycles includes its US$1 billion fleet divestment in 2007, and its US$4.8 billion fleet investment and divestment cycles running from 2008 to 2020.
Deal origination, technical management, and ongoing lease management will all be handled in-house via LCI’s full-service leasing, management and investment platform.
The 2013-build Airbus aircraft is powered by Rolls Royce Trent 700 engines. It was acquired by a joint venture between LCI and Marathon Asset Management.
Michael Platt, Vice Chairman of LCI, says: “LCI prides itself on being a prime-mover in aviation leasing as demonstrated by strategic investments in widebody aircraft, freighters and helicopters, and this acquisition marks the latest chapter in that strategy. The A330-300 is a proven and popular aircraft with airlines across the globe, and a natural choice as the long-haul market recovers.”
“We are delighted to be working with the Marathon Asset Management on this acquisition. Our combined aviation and investment expertise will make this a strong and successful partnership.”
Joe Thorstenson, Managing Director of Aircraft Leasing at Marathon Asset Management, says: “As the airline industry continues to build back from the pandemic, we believe the range of compelling aircraft investment opportunities is growing quickly. We are delighted to be partnering with such an experienced lessor as LCI.”