CASE STUDY: SINGAPORE AIRLINES

A global growth strategy, entailing the increase in both fleet and
passenger numbers as well as new routes, Singapore Airlines
needed to manage its objectives in a structured and sustainable way. 

With a master agreement to take a number of new A350 aircraft from Airbus, an interim capacity of aircraft was necessary until the new generation aircraft were delivered a decade later. Lease financing was the answer, with LCI agreeing to purchase a quantity on the airline’s behalf and put in place advantageous lease financing arrangements.

CHALLENGE

With ambitious plans for global expansion and rapid fleet growth, Singapore Airlines (SIA) required a number of aircraft to facilitate its aims for new routes and higher passenger numbers. The airline had agreed to lease 19 A330-300 as part of an agreement to order the new A350 aircraft from Airbus. Initially seen as interim capacity, the A330s would be deployed on regional operations in Asia, including flights from Singapore to Japan, China, Australia and the Middle East, SIA needed a financing partner to help it bring the aircraft into the fleet but in a structured and off-balance sheet way.

SOLUTION

Working together with Airbus and SIA, LCI agreed to purchase 11 A330-300 aircraft which were delivered in 2009-10, all on flexible lease terms which allowed SIA to match their capacity requirements and the new aircraft delivery schedule. The A330 has proved to an ideal aircraft for regional operations, with low operating costs and comfortable passenger experience.  While the initial aircraft were delivered on a relatively short interim lease, the majority have now been extended by SIA who have also taken additional A330-300 aircraft to bring their fleet to over 30 aircraft.

BENEFIT

With a local presence in Singapore and existing relationship with SIA, LCI had worked closely with the airline on its fleet requirements and was the single largest lessor to the airline. Over the last few years, LCI has sold a number of these aircraft to other lessors and investors and has also started successfully to transition some aircraft to new operators at the end of the original lease term. Over the last few years, LCI has sold a number of these aircraft to other lessors and investors and has also started successfully to transition some aircraft to new operators at the end of the original lease term.

SIA needed a flexible financing partner to bring aircraft into the fleet in a structured and off-balance sheet way...