KUALA LUMPUR/SINGAPORE (Reuters) – AirAsia Bhd is selling its plane leasing operations to firms managed by BBAM Ltd, one of the world’s largest aircraft portfolio managers, in a staggered deal that will see the budget carrier transfer ownership of up to 182 Airbus jets.
The transaction, valued at $1.2 billion in the first phase, will help Asia’s biggest budget airline cut debt and return money to shareholders, as well as give it firepower to grow its business. AirAsia shares rose 5 percent to a record on Thursday after the deal was announced.
Malaysia-based AirAsia is cashing in on a booming leasing sector after ordering hundreds of Airbus planes at bargain prices in recent years to become one of Airbus’ biggest customers.
The sale is part of AirAsia’s restructuring efforts that include selling stakes in businesses and revamping associate airlines since the group’s finances came under scrutiny three years ago as amounts owed by its associate firms rose.
In the first phase of the transaction, AirAsia will sell a portfolio of 84 aircraft and 14 engines to Fly Leasing Ltd, Incline B Aviation Ltd Partnership and Nomura Babcock and Brown for $1.2 billion.
Photo Rob Vogelaar