Easyjet has issued a number of “creative” sale and leaseback (SLB) proposals in recent weeks, a leasing source tells Airfinance Journal.
According to a number of requests for proposals (RFPs), the UK low-cost carrier is offering older Airbus A319s along with A320neos, on condition that lessors take the older aircraft together with the newer technology. At present the Luton-based carrier has a proposal in the market for 10 A319s and between four and five A320neos, the source says.
“They are saying to the lessors: ‘Hey, if you want to take five Neos then you have to take five A319s at the same time’,” they add.
A banking source confirms the RFP, adding: “We have seen bits and pieces of that. There is some Easyjet paper flying around and lessors are seeing banks to finance that.”
The carrier is also seeking to “fix” lease rates in its initial pitch rather than reach an agreement on them via negotiation with the lessor at a later stage, a tactic the source says is a fairly new approach from airlines. The carrier is seeking lease rate factors of 0.95% or less for the older aircraft in its RFPs, and much lower for the Neos.
Easyjet is also seeking terms in its RFPs under which it would be able to return the A319s to lessors without disclosing their engine status, meaning that the return conditions are “minimal”.
“So basically, they could hand you the keys to a completely run out aircraft,” the source adds.
"RFPs structured this way, essentially reverse engineering the deals, is a creative way for the airlines to maximise its value and cash for the assets," the source adds.
In a recent trading update, Easyjet said that as of 30 June it had generated £140 million ($181 million) in proceeds from SLB deals. As of 4 August, total SLB proceeds amount to £405 million. The airline said it intended to close further deals worth between £150 million and £250 million.
So far this year the carrier has agreed transactions with lessors including SMBC Aviation Capital and BOCOMM Leasing.
Easyjet declined to comment when contacted by Airfinance Journal.