Finnair signs sale-leaseback agreement for four A350 aircraft for refinancing in excess of $ 400 million

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© Maarten Van Den Driessche

Along with Finnair’s efforts to emerge from the corona crisis, the company is continuing its refinancing plan and has finalized a sale-leaseback agreement for four of its Airbus A350s. In the deal, Finnair sold these planes – delivered between June 2017 and February 2019 – and re-leased them for its own operation. The duration of the operating lease is on average 12 years and the counterparties are GE Capital Aviation Services (“GECAS”) and Pacific Investment Management Company LLC (“PIMCO”) as lessors; GECAS is the rental manager.

The agreement will not have a material impact on Finnair’s operating income for the third quarter of 2021; however, the immediate positive cash flow effect for Finnair exceeds US $ 400 million. Finnair will use the cash to refinance existing debt and withdraw its unused revolving credit facility of € 175 million.

“This is the largest aircraft financing transaction in our company’s history,” says Finnair CFO Mika Stirkkinen. “This is an important part of our refinancing plan, which we diligently executed during the pandemic, and it helps us to further improve our capital structure.

Finnair has ordered a total of 19 new A350-900 XWBs from Airbus, of which 16 have been delivered. The remaining three A350s are expected to be delivered in Q2 2022, Q4 2024 and Q1 2025.

The fleet operated and / or owned by Finnair is shown on the company’s website at https://www.finnair.com/gb/gb/flights/fleet and updated quarterly in the financial reports of the company.

Finnair Plc Stock Exchange Release September 28, 2021 at 9:00 a.m. EEST


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