Ethiad

UAE’s Etihad Airways has finalised a $367m deal with Sanad Aero Solutions (SAS) and Engine Lease Finance Corp (ELF) for the financing of its 23 spare engines in a sale and leaseback agreement.

Under the deal, Sanad, owned by the Abu Dhabi Government’s Mubadala, will buy five GE90 and six Rolls-Royce Trent 500 engines and lease them back to Etihad Airways, while ELF will purchase and leaseback to Etihad Airways six Rolls-Royce Trent 700 and six IAE V2500 engines.

Etihad CEO James Hogan told Reuters: "These spare engine sales and leaseback transactions provide the airline with a long-term financing solution for its entire spare-engine fleet while mitigating residual value risk and providing competitive cost of ownership over the long term."

Both transactions will have a lease term of ten years and the current financing is done for 16 in-service spare engines and seven future spare-engine deliveries. Sanad chief executive officer Troy Lambeth said the company is excited to expand its relationship with Etihad Airways through the transaction.

"It is another significant milestone in our shared mandate to establish Abu Dhabi as a global aerospace hub and expands the foundation for further cooperation and partnership between our companies," Lambeth said.

The company said the spare engines are meant for the carrier’s entire fleet of passenger and cargo aircraft. Etihad has reported a 28% rise in its revenue to about $1.72bn during the first half of 2011, putting it on target to generate its first net profit in 2012. The state-owned airline has a fleet of 64 Airbus and Boeing aircraft and has placed orders for an additional 100 aircraft.

Etihad had also ordered ten Boeing 787-9s under a $2.3bn contract and two freighter versions of the 777 model for its cargo operations. It also provides services to 82 passenger and cargo destinations in the Middle East, Africa, Europe, Asia, Australia and North America.

Image: Etihad Airways operates a fleet of 64 aircraft and has ordered 100 additional planes. Photo: moaksey.