Air India becomes first Indian carrier to ink sales & leaseback accord
National/IBNS: Tata Group's airline Air India signed a definitive sale and lease back agreement with Florida-based Willis Lease Finance Corporation for 34 CFM56-5B engines installed on its Airbus A320 family fleet.
The engines will be covered under Willis Lease’s ConstantThrust program, making it the first sale and leaseback agreement for aircraft engines by any Indian carrier.
It will also enable cost savings versus a traditional MRO shop visit.
Under the sale side of the transaction, Willis Lease will purchase 34 engines from Air India which power 13 Airbus A321 aircrafts and four Airbus A320 aircrafts.
As per the deal, Willis Lease will provide replacement and standby spare engines, allowing Air India to avoid potentially costly and unpredictable shop visits on engines powering a transitioning aircraft fleet.
The global aviation finance firm will also have an in-country team to co-ordinate and manage the entire programme and all logistics and transportation involved.
CCO at Air India Nipun Aggarwal said, "This transaction will allow Air India to de-risk itself operationally, improve fleet reliability, reduce cost, and optimize cash flows.”
Brian R. Hole, President of Willis Lease, said, “Air India ran a rigorous process to evaluate all options for managing the substantial maintenance, operational risk and logistical burden these engines would have created."