Aircraft

Tour operator TUI Travel is to sell 19 of its aircraft to a 50:50 joint venture between Dutch lessor AerCap and DVB Bank’s Deucalion Aviation Funds, and lease back the fleet.

The aircraft include two Boeing 767-300ERs, six Boeing 757-200s and eleven Boeing 737-800s, operated as part of the fleets of TUI Travel’s in-house carriers TUIfly, TUIfly Nordic and Thomsonfly.

TUI Travel, which listed the book value of the aircraft at $681 million at the end of May, says it expects the transaction to be “earnings neutral” for the year ending 30 September 2008. The sale will generate proceeds of $526 million, which will be used to pay off debt.

“The transaction enables the group to further increase the flexibility of its business model while securing continued access to modern and fuel-efficient aircraft such as the 737-800,” says the company.

All 19 aircraft will be on operating lease, guaranteed by TUI Travel, for terms of between one and seven years. While they will be acquired through the joint venture, the aircraft will be managed by AerCap.

“With this major acquisition of 737-800s, we have strengthened our portfolio and continued to optimise our fleet with young, fuel-efficient aircraft which remain in strong demand in the current high fuel-price environment,” says AerCap.

It will satisfy the transaction with cash. AerCap says it has arranged debt financing for the agreement outside of its available lines of credit and sourced equity through DVB Bank. The joint venture will pay AerCap servicing fees for management of the aircraft.

Financial companies Calyon, Deutsche Bank, HSH Nordbank and KfW IPEX-Bank have underwritten secured debt with respect to the aircraft involved.

While the arrangement includes part of the TUIfly fleet, TUI Travel points out the agreement will have “no impact” on the negotiations over a possible merger between TUIfly and Lufthansa-affiliated budget carrier Germanwings.

Source: flightglobal's sister premium partner Air Transport Intelligence news