IndiGo sells 8 Airbus A320neos to BOC Aviation in sale-leaseback


Indian low-cost large IndiGo has signed a sale-leaseback settlement with BOC Aviation for eight new A320neos. The planes shall be delivered within the second half of 2021 and shall be outfitted with CFM engines. Let’s discover out extra about this provide.

IndiGo has a quickly rising fleet of A320neos, with a whole bunch of orders. Picture: Airbus

Key motion

IndiGo is not any stranger to plane leasing, with most of its fleet of 284 plane having been acquired beneath lease contracts. The newest cope with Singapore-based BOC Aviation alerts a deeper partnership between the 2 aerospace firms as IndiGo will carry extra plane within the coming years.

The deal consists of the sale and leaseback of eight new Airbus A320neos, that are anticipated to be delivered within the second half of this 12 months. The planes may even be powered by CFM LEAP-1A engines, the newest engine ordered by IndiGo after the Pratt & Whitney engine debacle.

IndiGo A320neo
IndiGo has began taking deliveries of A320neos with CFM engines since final August. Picture: Airbus

In a press release on the most recent sale and leaseback, BOC Aviation CEO Robert Martin stated:

“We’re delighted to accomplice once more with IndiGo, India’s largest passenger airline, as we proceed to assist our airline clients finance their plane deliveries… These further capital expenditures additionally mirror our technique of disciplined funding all through the cycle, targeted on constructing a portfolio of state-of-the-art plane. “

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What’s sale and leaseback?

For individuals who is probably not acquainted, a sale and lease (SLB) is a monetary technique wherein airways promote their planes to lessors after which lease the identical airplane to be used. Since many airways order a whole bunch of gadgets at a time, they often get massive reductions off the record value.

With SLB presents, airways obtain elevated money move from the earnings they make by promoting the plane to lessors. On this manner, airways can function dozens of plane with comparatively decrease preliminary funding prices and proceed to develop. As well as, to maintain fleets younger, airways can return their planes to the lessor after a specified interval.

Cathay Pacific Getty
Airways all over the world entered into sale-leaseback agreements to promote their plane and lift capital through the disaster. Picture: Getty Pictures

The previous 12 months has seen a wave of sale and leaseback offers as airways search to lift capital. Carriers like Air Canada, Air France and Cathay Pacific have all chosen to promote their planes and lease them for revenue. BOC Aviation, particularly, has been very busy, signing offers with Wizz Air, United, Cathay and lots of extra.

IndiGo continues to develop

Regardless of a troublesome 2020, IndiGo has proven no indicators of slowing down its A320neo deliveries. As a substitute, the provider has ramped up deliveries, taking 44 new planes final 12 months and changing into Airbus’ greatest buyer for 2020.

The choice to proceed deliveries has been made because the airline plans to withdraw all of its 120 A320-200s and change into a totally A320neo (and ATR 72) firm throughout the subsequent two years. Which means the provider has consistently added new A320neos and A321neos to its fleet.

IndiGo A320 Getty
IndiGo is rapidly abandoning its A320-200 fleet because it plans to change into a totally A320neo provider quickly. Picture: Getty Pictures

The years to come back will see IndiGo signal many extra SLB agreements because it often clears its order e book for greater than 800 plane.

What do you consider IndiGo’s promote and lease choices? Tell us within the feedback!

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