Singapore Airlines (SIA) recently announced to the media that it had completed sale-and-leaseback transactions that helped them raise $1.5 billion. The transaction was for 11 aircraft that included seven Airbus A350-900s and four Boeing B787-10s.
SIA stated in a bourse filing that Aergo Capital, Altavair, EastMerchant/ Crianza Aviation and Muzinich are the four parties that arranged the transactions. The deal with Aergo Capital, the aircraft leasing company, includes one Airbus A350-900 and one Boeing 787-10 aircraft. The transaction with Altavair, an aviation finance company, involves four Airbus A350-900. The EastMerchant is a provider of asset-based finance and management solutions for the airline industry and was dealt with one Airbus A350-900 and two Boeing 787-10s. Crianza Aviation is a high-value aircraft lessor and asset manager. Airbus A350-900 and one Boeing 787-10 aircraft were dealt with Muzinich and Co, a privately-owned, institutionally-focused investment firm.
Rivals of SIA like Cathay Pacific Airways and Qantas have had similar deals during the Covid-19 pandemic. The additional liquidity from these sale-and-leaseback transactions is expected to reinforce SIA’s ability to navigate the impact of the pandemic to build back stronger.
After the onset of the spread of coronavirus, the domestic travel market of SIA was heavily affected. Currently, after the strict quarantine regulations and cross border restrictions, the government has also halted international travel. It has also affected the opening of the travel bubble with Hong Kong that is currently set for 26 May 2021. The shares of SIA dropped by 3.2 percent earlier this week, which is a steep drop in the two weeks.
SIA stated that it would continue to explore the additional means to raise liquidity as per the requirement in a period of uncertainty. The airline industry continues to navigate unprecedented challenges due to the pandemic.