Air France Sells 16 Airbus A320 Family Aircraft In Order To Lease Back

Created on 13.05.2020 12:02

Looking to strengthen its financial position and secure more funds, Air France will enter into a sale and leaseback agreement for sixteen of its A320 family aircraft. According to CH-Aviation, this will consist of six A319-100s and ten A318-100s. Sale and leaseback is something we’ve seen take place more frequently as airlines look to survive this global crisis

Sources report that Air France is participating in a sale and leaseback agreement with global lessor FTAI Aviation. This agreement will cover a total of 16 Airbus narrow body jets in possession of the French flag carrier.

According to a statement from the lessor, the transaction specifically covers six A319-100s and ten A318-100s (also known as the ‘baby bus’). All aircraft are powered by CFM International CFM56-5B engines. Airbus A330 Vs Airbus A340 Expected to close later this month, the deal sees an average lease duration of 34 months. The specific value of the contract was not disclosed. In total, Air France owns all of its 18 A318-100s. Additionally, the airline owns 20 of the 33 A319-100s in its fleet.

While sale and leaseback ultimately mean a higher cost for the airline in the long-term, the true value of such an agreement is time. When an airline sells its most valuable assets to an aircraft lessor, it’s buying itself time to weather this difficult storm of financial uncertainty. With the funds raised, airlines can cover their operating costs in the short term. This includes maintenance on parked aircraft and administrative overhead.

3499 views