Airline agrees sale and leaseback of six aircraft in £206m deal

Budget carrier easyJet has agreed the sale and leaseback of six A320neo (new engine option) aircraft for aggregate cash sales proceeds of around £206m.

The proceeds of this deal make up part of the anticipated £500-650m in funding from sale and leasebacks which was highlighted in the trading update of May 28, and will be used to maximise liquidity and further strengthen the financial position of easyJet, which operates 46 routes from Manchester Airport and 34 from Liverpool John Lennon Airport.

The net book value of the aircraft, which vary in age from six months to two years of age, was approximately £141m as at March 31, 2020.

The transaction was executed in two parts, with the initial proceeds of around £102m relating to three A320neo aircraft included in the reported £301m SLB proceeds outlined in the first half results of June 24, and the remaining £104m forming part of the anticipated remaining proceeds from SLB transactions.

The aircraft will be sold to SMBC Aviation Capital, the global aircraft leasing company, and leased back for terms of between 110 and 122 months.

The lease obligations generated amount to a total of approximately £155m.

Over the terms of the leases the average net annual headline cost reflected in easyJet’s income statement will be in the mid-single digit millions of pounds.

The carrier and SMBC Aviation Capital have also identified other unencumbered aircraft in the easyJet fleet and, if easyJet decide to sell these aircraft over the next 18 months, SMBC will be the preferred partner for the transaction.