AirAsia Sells 25 Planes To Castlelake

AirAsia sells 25 planes to Castlelake.
   
Castlelake will also buy 4 new planes to be delivered in 2019. 
   
The 29 planes - Airbus A320ceo and A320neo - will be leased back to AirAsia. 
   
The deal marks a trend of investing in the plane-leasing sector on growing demand from low-cost carriers. 
   
Castlelake has been boosting its holdings of aviation assets.  In June last year, it raised $1 billion from family offices, sovereign wealth funds, endowments, and pension funds.
    
For AirAsia, the $768 million deal is a further move to monetize its assets as it transforms into an asset-light, digitally focused firm.  AirAsia is leveraging a booming leasing sector after ordering hundreds of Airbus planes at bargain prices in recent years.  Some proceeds from the sale will be used to pay down debt.
    
Castlelake will buy a company called Merah Aviation Asset Holding, which holds 25 existing planes and another 4 new planes to be delivered in 2019.
   
Tony Fernandes of AirAsia said: 'This transaction is part of AirAsia’s ongoing transformation into something more than an airline.  As we move towards becoming a travel technology company, the disposal of these planes will unlock significant value and also bring us closer to our goal of being a truly digital company.  Years ago, analysts criticized us for having high gearing and owning assets. Now you understand why we did that.'
   
BNP Paribas is a financial adviser to AirAsia.  Stephenson Harwood and Tay & Partners are AirAsia legal counsel.  Castlelake has Vedder Price as legal counsel.

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