Ryanair to make EETC decision this year

Source: Flightglobal.com
This story is sourced from Flightglobal.com

Ryanair will decide in the second half of this year whether to issue an enhanced equipment trust certificates (EETC) financing to support some of its upcoming deliveries.

Speaking at the Ascend Finance Forum Ryanair's treasurer Jimmy Dempsey said the EETC market is one of several financing options for the Irish-based budget carrier for future funding.

"We have now seen the Air Canada and British Airways executing EETCs and you could see something similar coming from us in the future, when we have to get around funding our orderbook," he says.

"We are currently assessing this option with a view to take a decision over the next coming months," he says

"If we go for it, we will issue a EETC in 2015," he adds.

According to Dempsey, Ryanair will likely do repeat transactions that could eventually include up to a third of the Ryanair fleet. But he does not know yet whether Ryanair would combine used aircraft along with new Boeing deliveries in the potential EETCs.

The structure could be combine funding from the Japanese operating lease market, similar to the recent British Airways transaction, he says.

He admits changes in the new Aircraft Sector Understanding, which impacts export credit financing, is making funding "more expensive" for the carrier.

Dempsey says Ryanair will probably fund about 30 of the 175 new aircraft deliveries through operating leases but will also use internal cash resources on part of the orderbook.

The carrier placed an order for 175 units earlier this year with deliveries starting in 2014. The first 11 scheduled 737-800 will arrive by the end of March 2015.

"We will have a slow start in the deliveries because of slots constraints but we will start to take aircraft in scale from 2015/16 onwards," he says.

The carrier will respectively take 35, 50, 50 and 29 aircraft over the following four years.