October 11, 2020 By Wings Staff
Air Canada on October 8, 2020, announced it recently completed the sale of nine Boeing 737 MAX 8 aircraft, including to Jackson Square Aviation and six to Avolon Aerospace Leasing Limited. The move generated proceeds of US$365 million (C$485 million).
As part of the transactions, Canada’s national airline also entered into leasing deals with Jackson Square and Avolon to operate the nine aircraft. These long-term lease commitments amount to US$345 million (C$458 million). The nine aircraft involved in the leaseback transactions were delivered to Air Canada over the past three years.
“Since the start of the COVID-19 crisis, Air Canada has accessed financial markets numerous times and has successfully raised almost $6 billion in liquidity, on reasonable terms and conditions, including with this transaction, as it continues to maintain liquidity levels to mitigate the challenges and uncertainty ahead,” said Michael Rousseau, Deputy Chief Executive Officer and Chief Financial Officer of Air Canada. “We are very pleased to be extending our strong relationship with Avolon and beginning a new relationship with Jackson Square Aviation.”
In addition to raising almost $6.0 billion in liquidity since the start of the Covid-19 pandemic in the first quarter of 2020, Air Canada has also recently completed two long term financings to replace $1.4 billion in short-term debt coming due within the next nine months.
Air Canada states the net proceeds from the transactions will serve to increase its cash position, thereby allowing for additional flexibility in the implementation of mitigation and recovery measures in response to the COVID-19 pandemic.