Etihad Airways, the second-largest airline in the UAE, has now signed an agreement to sell 38 aircraft to KKR which is a global investment firm, and Altavair AirFinance, a commercial aviation finance company. The deal is said to be worth $1 Billion.
In this agreement, it is selling 16 Boeing 777-300ERS, 16 A330-200s, and 6 A330-300s. Etihad which has been struggling financially for quite some time, last year announced that it was canceling many of their new aircraft orders. Etihad which has suffered a loss of over $5 million in the past three years is trying to cut its costs and increase its revenue. One of the big reasons for Etihad‘a loss was also its unprofitable airline investments, such as Alitalia and Air Berlin. Etihad has been trying everything present in the book to reduce its cost and turn profitable again, from retiring its fleet of A330's to restructuring the way it works.
In a statement Steve Rimmer, Altavair CEO said, “We are delighted to extend our partnership with Etihad and play a major role in the re-positioning of their fleet. Altavair’s extensive wide-body experience and expertise combined with KKR’s capital, relationships and capabilities made this transaction possible. We appreciate the trust that Etihad has placed in us and look forward to a long and mutually beneficial relationship.”
Whereas Tony Douglas, Group Chief Executive Officer, Etihad Aviation Group said, “We’ve made great strides in optimizing our fleet structure over the past year, and this investment from KKR and Altavair AirFinance will allow us to take another step forward in this area. This deal will ensure we stand by our strategic and financial sustainability targets by replacing aircraft with the most technologically-advanced and fuel-efficient fleet types.”
Etihad Airways which was founded in July 2003, now operates more than 1,000 flights every week to more than 100 destinations worldwide. In this deal, Etihad Airways will be leasing back all the Boeing 777s once the deal is finalized and the rest of the Airbus A330s will be placed on lease with other operators across the globe.