MIAMI – Finnair (AY) has found a new way to finance its 17th Airbus A350 on order by entering a lease financing agreement with JLSP Holding Ireland Ltd, which shall be both the lessor and the lender.
According to Aviator Aero, the change is part of AY’s efforts to restore itself and navigate the current crisis impacting global air trade by achieving cost savings and pursuing traditional and conventional liquidity enhancement schemes.
Under this scheme, the aircraft is purchased by a third party and then leased back to the airline. According to aviator.aero, the A350 concerned by this plan is the 17th aircraft ordered by AY and to be delivered mid-2022 while the lease shall begin by the end of the current year including a storage period awaiting entry into service sometime in 2022.
Two more A350 aircraft, the last ones, are expected in 2024-2025, for a total of 19 Airbus A350 in AY’s fleet.
Not a New Scheme
France Nouvelles du Monde, reported that this is the second time that AY employs a financing scheme for new aircraft purchases. In 2020 AY secured loans in excess of €100m (US$119m) from UK export Finance, COFACE (France Compagnie Française d’Assurance pour le Commerce Exterieur), and the German consortium, which guarantees export credits and is composed by Euler Hermes Kreditversicherung-AG, PriceWaterhouseCooper-AG Wirtschaftsprufüngsgesellschaft (PwC).
This type of credit guarantee is available for qualified Airbus aircraft purchasers. AY used this facility to acquire an A350-900 which was delivered in September 2020. This financing was secured d by JPMorgan Chase Bank, NA, London Branch.
As reported by France Business Travel AY had already obtained a non-guaranteed hybrid loan by partnering with the state to secure a €400m (US$325m) to be made available to AY in case their own equity or treasury runs under limits that are to be defined.
The loan is subject to “a final decision at the plenary session of the government on the financial arrangement. It will also define the final loan conditions” as indicated by AY.
In December 2020 AY disposed of €940m (US$761m) in equity and a €725m (US$587m) treasury.
Finnair Airbus A350-900 OH-LWG – Photo: Brandon Farris/Airways