Air India has signed a definitive sale and lease back agreement with Willis Lease Finance Corporation (NASDAQ: WLFC) for 34 CFM56-5B engines installed on its Airbus A320 family fleet.
The engines will be covered under Willis Lease’s ConstantThrust® program, which will deliver significant reliability and cost savings versus a traditional MRO shop visit program. This is the first ConstantThrust® sale and leaseback agreement for aircraft engines by any Indian carrier. Under the sale side of the transaction, Willis Lease will purchase from Air India 34 engines powering 13 Airbus A321 aircraft and 4 Airbus A320 aircraft.
Through ConstantThrust®, Willis Lease will provide replacement and standby spare engines, allowing Air India to avoid potentially costly and unpredictable shop visits on engines powering a transitioning aircraft fleet. Willis Lease will also have an in-country team to co-ordinate and manage the entire programme and all logistics and transportation involved.
Speaking on the agreement, Nipun Aggarwal, CCO of Air India, said, “This is a very unique and landmark transaction which will enable Air India to eliminate the maintenance burden and fully de-risk itself from the maintenance cost uncertainty associated with the engines which were not covered under any “Power By The Hour” program with the OEMs. This transaction will allow Air India to derisk itself operationally, improve fleet reliability, reduce cost, and optimize cash flows.”
Brian R. Hole, President of Willis Lease, said, “Air India ran a rigorous process to evaluate all options for managing the substantial maintenance, operational risk and logistical burden these engines would have created, and we are proud that all the benefits of ConstantThrust® rose to the top in the end. Air India’s selection of ConstantThrust® validates our longstanding belief that traditional options are not the only options for airlines willing to spend the time to fully investigate the benefits of our programmatic solutions.”
