News
AerCap and CALC add to A320neo backlog
January 5th 2018
Dublin-based AerCap and Hong Kong-headquartered China Aircraft Leasing Group (CALC) have upped their A320neo commitments, with both lessors placing fresh orders for 50 A320neo each. Read More »
Following the top-up deal, AerCap now has ordered 270 A320neo Family aircraft from Airbus.
“As the largest lessor of the A320neo Family aircraft, we have already placed three-quarters of our A320neo Family aircraft from our existing forward order book with Airbus. We have seen significant market appetite for these aircraft from our diverse customer base. This transaction is in line with our portfolio strategy of investing in the most in-demand modern technology aircraft in the world,” commented AerCap CEO, Aengus Kelly.
Airbus’ chief salesman and COO for customers, John Leahy, said AerCap’s top-up order was “a fabulous endorsement of the world’s favourite single aisle aircraft”.
Closer to home, Hong Kong’s CALC also has inked a firm order for 50 additional A320neo aircraft. CALC said the 50 planes would be delivered to the lessor “in stages in 2023”.
The new order raises CALC’s total order book with Airbus to 202 aircraft.
Announcing the order, CALC said it “shall purchase 15 additional Airbus A320neo aircraft in January 2018 subject to the fulfilment of certain conditions”.
“We are proud to augment our fleet by adding 50 in-demand A320neo jetliners […]. This bulk purchase will significantly expand CALC’s fleet portfolio and further solidify our position as a full value-chain aircraft solutions provider. Currently, the majority of our fleet comes from direct purchase from manufacturers and that will remain the major source of our new aircraft,” said CALC CEO, Mike Poon.
In the same announcement, CALC disclosed plans to establish an aircraft investment vehicle with mezzanine tranche financiers. If approved, the lessor would provide 20% of the capital – and risk – and the mezzanine financiers would provide the remainder.
CALC said the new platform would further extend its asset management capabilities to capture the growing appetite from institutional investors for aircraft assets with stable and long-term cash flow, in addition to diversifying risk.
The investment vehicle will be seeded with an initial portfolio of narrowbody aircraft assets with a market appraised value of approximately US$826 million. CALC aims to grow this to approximately US$1.4 billion in two years’ time from launching the new financing vehicle.
“The new platform will serve as an additional financing channel to support CALC's global expansion. It will also enable the Group to progressively adopt an asset-light business model by efficiently turning over its capital, so as to scale up the aircraft asset under the Group’s management. With lessened balance sheet pressure that allows greater flexibility, CALC will be able to focus on its core competitiveness in aircraft servicing and management, ultimately generating better returns for its shareholders,” Poon commented.
Separately, on Thursday, CALC announced it had entered into a sale and leaseback agreement for five A320ceo aircraft with low-cost carrier Viva Air, the lessor’s first contract with the Panama-registered budget carrier group.
"On Friday morning, CALC did indeed confirm an order for 15 additional A320neo, increasing its latest commitment to 65 of the re-engined jet."
