Jetstar Japan considers balance sheet financing

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Jetstar Japan is ready to diversify its financing strategy by doing more transactions on balance sheet.

The carrier has financed its 24-aircraft fleet with sale and leaseback transactions from MCAP, Hong Kong Aviation Capital, Tokyo Century leasing and Jackson Square Aviation.

Vincent Hodder, executive director and senior vice president operations of Jetstar Japan said today at the International Society of Transport Aircraft Trading (ISTAT) conference in Tokyo that the Japanese budget carrier is now considering on balance sheet financings that involve interest and depreciation costs advantages not available through operating leases.

"If debt providers can take a more strategic view of the industry than operating lessors we would consider balance sheet options," he says. "They have to be more creative than the current financing proposals they currently offer."

Hodder says future aircraft could be provided by parent company Jestar Group, or the budget carrier could place a direct order with Airbus.

Jetstar Japan operates an 11 Airbus A320 aircraft fleet. Hodder says that the carrier has options on two A320s to convert them into a different financing structure.

The budget carrier has another 13 aircraft on order with deliveries scheduled through August 2014.