Starlux Airlines has secured a $123.7 million syndicated loan agreement with 10 local banks, which will support the purchase of 18 Airbus A350 passenger jets. This cash infusion will give a significant boost to the airlines’ plans of expanding operations on the US and Asian routes. One of the important reasons behind acquiring the A350 was to launch a long-haul flight to the US. This plan was derailed due to pandemic restrictions. Now, the airline plans to start Los Angeles flights soon after 2023, according to an airline spokesperson.
The airline said that the syndicated loan was 52% oversubscribed by the banks led by Taiwan Cooperative Bank. Other banks in the deal include Hua Nan Commercial Bank, Taiwan Business Bank, and Shanghai Commercial and Savings Bank.
This is the first syndicated loan for Starlux after the airline conducted five capital injections to boost its paid-in capital to approximately $580 million since it was founded in 2018, the airline said.
The airline expects the first of the A350s to arrive next month. It already has 13 aircraft in its fleet and plans to add four Airbus 321neo jets and one Airbus 330neo aircraft by the end of this year, taking the total number of planes in its fleet to 19.
Starlux was the worst hit during the pandemic as it posted a net loss of around $85 million in the first half of this year, with overall losses touching approximately $308 million since it was established in early 2020. However, as the passenger traffic picked pace, post-pandemic, the carrier’s revenue grew by 130% in the first eight months of 2022 to $35 million.