Air India signs sale-leaseback agreement with Willis Lease
New Delhi, Sep 22 (UNI) Air India, owned by the Tata Group, announced on Thursday that it has signed a sale-leaseback agreement with Willis Lease Finance Corp for 34 CFM56-5B engines installed on its Airbus A320 family fleet.
In a sale-leaseback financing model, an asset is sold to a leasing company and then immediately leased back to the seller. This frees up capital for operations and transfers residual value risk to the leasing company.
Air India, in an official statement, said the engines will be covered by Willis Lease’s ConstantThrust program, which will provide significant reliability and savings compared to a traditional MRO (maintenance, repair and overhaul) shop visit program. .
Headquartered in Florida, USA, Willis Lease is one of the world’s leading aviation finance companies, specializing in the leasing, financing and management of aircraft, spare commercial aircraft engines and auxiliary power units.
“As part of the sale of the transaction, Willis Lease will purchase from Air India 34 engines powering 13 Airbus A321s and 4 Airbus A320s.
“Through ConstantThrust, Willis Lease will provide replacement and standby engines, enabling Air India to avoid potentially costly and unpredictable shop visits to engines powering a transitioning fleet of aircraft,” Air India said.
Speaking on the deal, Air India CCO, Nipun Aggarwal said the transaction with Willis Lease is very unique and historic which will enable Air India to eliminate the burden of maintenance and fully rid of the risks associated with the uncertainty of maintenance costs associated with engines that were not covered by any “Power By The Hour” program with OEMs.
“This transaction will enable Air India to reduce operational risks, improve fleet reliability, reduce costs and optimize cash flow,” he said.
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