Finnair (HEX: FIA1S) has entered into a memorandum of understanding with GE Capital Aviation Services Limited (GECAS), on the sale and leaseback of two Airbus A350 aircraft, the company said.
The financing will cover Finnair´s sixth and seventh A350 deliveries, which are currently scheduled to enter the Finnair fleet in July 2016 and February 2017, respectively. The value of the transaction at present foreign exchange rates is approximately 265 million euro. The lease period is 12 years, and it includes extension options.
Calculated at current foreign exchange rates, the arrangement, including the gain on sale and currency gains on pre delivery payments and currency hedges, is expected to have a positive, non-recurring effect of approximately 90 million euro on Finnair´s operating profit. The actual financial impact will fluctuate depending on the EUR/USD rate prevailing at the time of each delivery. The income will be recognized in connection with each delivery, which given current delivery schedules will be reflected in the Q3 2016 and Q1 2017 financial statements, respectively.
Finnair has ordered a total of 19 new A350-900 XWB aircraft. Finnair took delivery of its first A350 aircraft on 7 October 2015 and the second on 14 December 2015. According to the currently anticipated delivery schedule, Finnair will have five A350-900 aircraft at the beginning of the second quarter of 2016, seven by the end of 2016, 11 by the end of 2017, and 19 by the end of 2023.
Disclosures on financing arrangements for the A350 aircraft will be made as those agreements are finalized. Finnair´s fleet consists of both owned and leased aircraft.