Summary
- WestJet has signed a purchase order and leaseback cope with Genesis for six Boeing 737-800s, allowing the airline to lease back the planes.
- Genesis is a lessor with 32 customers, including major airlines like American Airlines and Southwest Airlines.
- Purchase and leaseback solutions help airlines release capital and acquire more aircraft while also reducing operational costs.
Canada’s WestJet has signed a purchase order and leaseback cope with Genesis for six Boeing 737-800s. The financial arrangement allows WestJet to lease back from the total service aircraft leasing company.
Growing the WestJet fleet via leasing
In a December 22 joint statement, WestJet and Genesis announced the transaction. As Aaron McKay, Vice-President Treasury and Fleet at WestJet, commented;
“With strong intentions to grow our 737 fleet in the approaching years, we appreciate Genesis’ support of WestJet’s ongoing fleet plans and look ahead to the longer term of this partnership.”
So what was that support? Namely a turnkey sale and leaseback in partnership with Dublin, Ireland-based aircraft lessor Genesis. The firm has 32 customers in 21 countries, with 55 owned, managed, and committed Boeing 737NG and Airbus narrowbodies in its fleet – a small lessor in comparison with the large five. Still, among the many 32 customers are significant airlines equivalent to American Airlines, Finnair, IndiGo, Jet2.com, Southwest Airlines, and United.
Photo: Joe Kunzler | Easy Flying
Now, Canada’s WestJet is amongst those customers. As Karl Griffin, chief executive officer of Genesis, shared within the lessor’s statement,
“I’m delighted to welcome WestJet as a brand new customer to Genesis, and we look ahead to further supporting WestJet as their fleet continues to grow over the approaching years. The challenge accepted by Genesis was to deliver a turnkey Purchase and Leaseback solution to WestJet by year-end, and I’m very pleased with how our team executed this commitment ahead of the vacations.”
How do purchase and lease-back leasing solutions work?
Sometimes, airlines sell planes to a leasing company after which lease them back. In a sale and leaseback model, an airline acquires the aircraft at a sexy price only to sell to a lessor — ideally at a profit — and leases it back for its use, paying just for the operating costs of the portion of the aircraft’s life the aircraft is used. One can read more details about leasing within the evaluation below:
Why Some Airlines Lease Aircraft While Others Buy Them Outright
Leasing frees up airline capital to accumulate more aircraft and meet other capital needs. Having newer aircraft which are more efficient might help reduce operational costs.
Reviewing fleets
A review of the ch-aviation database shows that before this acquisition, Genesis Aircraft Services had 15 Boeing 737-800s readily available which have a median age of 20 years, which makes the 737-800 the second most quite a few within the fleet. Even with six more, that is still the case, as Genesis also has 22 A320-200s.
Photo: Joe Kunzler | Easy Flying
For WestJet, the airline has 176 aircraft in total with 46 737-800s readily available – one lower than probably the most quite a few aircraft within the De Havilland of Canada Dash-8-Q400 turboprop. WestJet also enjoys 32 737 MAX 8s with 14 more on order and is waiting for 48 737 MAX 10s. The 737 MAX 8 offers 3,550 NM / 6,570 km of range versus the 737-800’s 2,935 NM / 5,436 km with its efficiencies.
Bottom line
WestJet’s sale and leaseback through Genesis Aircraft Services is an progressive technique to unlock capital to acquire probably the most out of gracefully aging airframes. One wonders how long until WestJet proclaims more 737 MAX purchases…
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