Delta leases Virgin E-170s for Compass operation

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Delta Air Lines has signed operating leases with Virgin Australia for six Embraer 170LRs, an industry source tells CAO.

According to the terms of the transaction arranged by Jetscape, the six aircraft are going on five-year leases to Delta and will be operated by Compass Airlines. Together with the incremental units from Republic (14 aircraft), Delta will use the 20 E-Jets to replace less efficient 50-seaters.

The 170LR fleet was delivered to Virgin Blue Airlines over a 12-month period between September 2007 and September 2008. The fleet was financed through a 'plain vanilla' debt 10-year structure provided by a pool of banks including ING, Commerzbank and Dekabank.

Virgin Australia is re-aligning its domestic and international fleet operations as it aims to challenge Qantas in the high-yield corporate market. The carrier operated an 89-aircraft fleet at December 2010, among which 21 Embraer 170/190s. It has added two new 190s on lease from CIT Aerospace since the beginning of the year and has another delivery on backlog.