Israeli carrier El Al has signed an agreement to sell and lease back two CFM International CFM56-7B engines for approximately $13-14 million.
El Al will lease the engines back for a period of seven years at a lease rate of 0.75%-1.2% per month. Under the terms agreement, the carrier has an option to extend the leases by five years.
"The transaction will be part of the funds to renew the company's aircraft fleet and implementation of its fleet planning," says El Al chief financial officer Nissim Malki.
El Al expects to recognise $9 million of capital earnings in the first quarter of 2012 as a result of the transaction.
According to Flightglobal's Ascend online database, El Al's narrowbody fleet includes two Boeing 737-700s along with 12 737-800s. The carrier has a backlog of four 737-900s as well as four options.