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    United leases 22 of its aircraft to BOC Aviation

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    United Airlines has entered into a leaseback agreement with BOC Aviation for 22 of its aircraft. This means that BOC Aviation will purchase the planes from United and then lease those same planes back to the airline, as announced on April 19th . 

    United will leaseback 6 Boeing 787s.

    The agreement between BOC Aviation and United

    Reuter’s org reports that the Singaporean BOC Aviation sale of the 22 aircraft to the Hong Kong Stock Exchange on Sunday. This deal includes six Boeing 787-9s and 16 Boeing 737 MAX 9s. Though the information is finite, the aircraft lessor indicated that the leases with United are long-term, meaning that the airline will continue to fly these aircraft.

    The agreement includes 16 737 MAX 9s.

    This leaseback is a way for United to conserve some money. Despite a deal with the United States Treasury of $5 billion to continue the rescue and emergency flights, the carrier still needs ways to raise more money. This leaseback means that United can earn some much-needed cash while also retaining aircraft for when they are ready to return to the sky.

    United’s recently finalized terms for $5 billion in aid from the US Treasury.

    This leaseback is a way for United to conserve some money. Despite a deal with the United States Treasury of $5 billion to continue the rescue and emergency flights, the carrier still needs ways to raise more money. This leaseback means that United can earn some much-needed cash while also retaining aircraft for when they are ready to return to the sky.

    Most likely, all of the 22 aircraft in this agreement are on the ground. The 16 MAX 9s, for sure, are grounded, while United’s expansive international route network has significantly cut back in recent days.

    Leasebacks 

    These agreements are nothing new in the aviation world. Etihad also did the same for its 38 aircraft in early February with a different company. In reality, these agreements do not change much about the aircraft and operation itself.

    United still has the rights to customize the interior of these aircraft. That would be incredibly important for the 787-9s, which set to undergo retrofits to include Premium Plus and Polaris. 

    In terms of its impact, United will receive some much-needed money in the short-term with leasing instalments in the long-term. Aircraft leasing is a complex network of agreements. However, rental of aircraft provides a way for airlines to acquire and operate new aircraft without requiring airlines to pay the full cost of the aircraft upfront, which can be in the hundreds of millions.

    BOC Aviation

    This company is a Singapore-based lessor wholly owned by the Bank of China with agreements around the world. The lessor works with airlines, including American, Interjet, Qatar Airways, and others.

    The move will raise short-term cash for the airline.

    As airlines around the world are facing negative pressure on their finances, BOC Aviation has made agreements with some carriers. That includes Hong Kong-based Cathay Pacific from whom the lessor purchased six Boeing 777-300ER aircraft.

    At the end of March, BOC Aviation owned and managed a total of 363 aircraft with another 204 aircraft on order. That includes aircraft from the A320 and A320neo family, the A330 and A330neo family, Airbus A350s, Boeing 777-300s, Boeing 737 NGs, and Boeing 737 MAX aircraft.

    Overall

    For passengers, this sale and leaseback agreement will not affect too much. The aircraft will continue to fly United’s colours once the global MAX grounding lifted and once international routes start to open up in full. In the meantime, this will provide much-needed money for the airline.


    Source:

    https://simpleflying.com/

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    Harsh Patil
    Harsh Patilhttps://avgeeksunited.com/
    I'm extremely passionate about aviation, and as the founder of this blog, I'd like to use this platform to further my desire to work in the industry.