Fortress Transportation and Infrastructure Investors (FTAI) is actively negotiating sale and leaseback transactions for more than 30 aircraft.
In a second-quarter trading update, the US lessor and investment firm said it was working on deals that are “similar” to one it closed in May with Air France for 16 aircraft along with 60 CFM56 engines.
“We believe these are some of the best investments we've ever made,” FTAI chief executive officer Joseph Adams said on an analyst call.
Adams estimated that the deal with Air France would provide $20 million of additional EBITDA. The second deal would add $40 million and the third deal about $25 million, he said.
He said the recent raising of $400 million through a bond issue would provide the company with the necessary resources to acquire new aircraft.
In July, Fortress acquired three Boeing 747-400 aircraft and two spare engines from Corsair.
The New York-listed investment company incurred a $15.7 million net loss for the quarter ending 30 June.
FTAI’s aviation business posted $77.5 million in EBITDA for the period, after an estimated $20 million negative impact from Covid-19.
The company agreed lease deferrals with 20% of its customers, averaging three months of deferral in return for three months of lease term extension.
Overall, it collected approximately $75 million in cash from customers, approximately 85% of a normalised run rate.
FTAI recognised $8 million of income from early lease terminations. It also said it took back seven aircraft and separated the engines as Adams believes “engine demand is and will return faster than airframe demand”.
As of 30 June, 65% of its fleet comprised 737s and Airbus A320s, 20% was cargo aircraft and engines, and 15% was 757 and 767 aircraft and engines.
At the end of June the grounded fleet was down to approximately 30% from a high of 65% in April. In some markets such as China and Vietnam it was less than 10% below 2019 levels.
The recovery for the 757 and 767 units will take longer, Fortress indicated. Demand for cargo conversions is supporting residual values, but freighter conversions take time and the international leisure markets are still largely closed, but expected to begin reopening soon, Adams believes.