US Airways is evaluating financing options for 17 Airbus A321s and A330s with deliveries scheduled in 2013.
Derek Kerr, chief financial officer of US Airways, says that it will probably use a combination of sale-leaseback (SLB) and enhanced equipment trust certificate (EETC) debt to finance the aircraft, during an earnings call today.
The Tempe, Arizona-based Star Alliance carrier has 21 deliveries scheduled for next year, including 16 A321s and five A330-200s. Kerr says that four of the aircraft are financed under an existing EETC.
He adds that the airline has backstop financing from Airbus in place for the remaining 17 deliveries.
Interest rates are low in the EETC market. United-Continental subsidiary Continental Airlines closed an $843.9 million two-tranche issue with coupons of 4% and 5.5% in October, and Delta Air Lines closed a $479.8 million issue with an average coupon of 5.3% in July. American Airlines is seeking court approval for a $1.5 billion aircraft-backed refinancing in order to reduce its interest payments, which are currently between 8.625% and 13% on the debt.
"The market is very strong for aircraft financing right now," says Doug Parker, chief executive of US Airways, during the call.
US Airways closed a $623 million EETC deal for 12 A321s in May. The three-tranche issue carried interest rates of 5.9%, 8% and 9.12%. Morgan Stanley, Citigroup and Goldman Sachs were joint bookrunners, while Barclays Capital, Bank of America Merrill Lynch and Natixis were co-managers.
US Airways has also closed SLBs with Avolon Aerospace Leasing, CIT and Jackson Square Aviation for five A321s this year.