Exclusive: BOC Aviation agrees 777-300ER leases | News | Airfinance Journal

Exclusive: BOC Aviation agrees 777-300ER leases

BOC Aviation agrees deal for new 777-300ER leases

Singapore-based lessor BOC Aviation confirms that it has outstanding orders for three new Boeing 777-300ER aircraft and that all three aircraft have been contractually agreed to go on operating lease with Thai Airways.

The aircraft are expected to be delivered in 2021.

The first aircraft has been produced; it was painted into Thai Airways’ base colours this week.

Airfinance Journal understands that the three incoming 777-300ERs will have the internal airline code ‘77V’ and that they will be the first Thai Airways 777-300ER aircraft to feature first class seating.

Under-administration Thai Airways has debts exceeding THB332 billion ($11 billion), its latest filings show. Loss before income tax for the three months ended 30 September 2020 was THB21.4 billion ($706 million), compared with a THB4.8 billion loss during the same period of last year.

For the first nine months of 2020, Thai Airways reported a loss before income tax of THB49 billion.

Thai Airways currently operates 14 777-300ERs manufactured between 2012 and 2015, Airfinance Journal’s Fleet Tracker shows. Of those, four 2013-vintage units are on lease from BOC Aviation while the remaining aircraft are owned or on lease from lessors including Aircastle and Castlelake.

In early November, Thai Airways put up for sale six Boeing 777-300 aircraft, alongside 10 747-400s and six 777-200s.

Following a restructuring the flag carrier plans to streamline its fleet to focus on Airbus A350-900, A330-300, 777-300ER and 787 series aircraft.

Thai Airways does not foresee a meaningful market recovery until 2025, and as such it needs to reduce its fleet, as well as aircraft variants, its chief financial officer said.

As for BOC Aviation, the lessor last week increased the amount of its committed, unsecured revolving credit facility from its largest shareholder, Bank of China, and extended the maturity to 2026 from 2022 previously. The facility now has $3.5 billion to support the lessor's growth, an increase of $1.5 billion.

As of 30 September, BOC Aviation had 555 owned, managed and on-order aircraft leased to 87 airlines in 39 countries and regions.

As of 30 November, there were only 16 unfilled orders for new 777-300ER aircraft, says Boeing.

BOC Aviation has the aforementioned three units on order for lease to Thai Airways, while Novus Aviation Capital has another two on order for lease to British Airways.

The remaining 11 777-300ER orders are split between Aeroflot (3), KLM (2), PIA (5) and undisclosed (1).

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