Travel firm TUI has said that it has agreed a sale and leaseback deal for five new Boeing 737 MAX-8 aircraft with BOC Aviation, raising $226 million to help boost its finances.
COVID-19 has wiped out air travel for Europeans for months, and now the threat of a resurgence in infections and new restrictions are causing more pain for airlines.
TUI has said that it needs to cut 8,000 jobs and shed 30% of its costs to prepare for a smaller tourism market.
The company said that the sale and leaseback deal, which applies to aircraft that it will receive next year, is part of its "asset right" approach to ownership and that it expects further sale and leaseback financing on its deliveries beyond 2021.
The agreement was on standard commercial terms, said TUI, and would create a lifetime lease obligation of approximately €223 million to begin at the end of its 2021 financial year.
During what has become the travel sector's deepest crisis, BOC Aviation has struck an estimated $5.5 billion in deals with carriers including Southwest and United Airlines to buy and lease back aircraft on what it says is more favourable pricing than would have been available in a stronger market.
The chief executive of BOC Aviation, which is based in Singapore and listed in Hong Kong, has said that he remains confident in the 737 MAX plane which has been grounded for more than a year pending regulatory approval following two crashes.
Crisis Deepens
Last week, the crisis for TUI deepened when it said that its UK unit was forced to cancel thousands of holidays after Britain advised against travel to Spain, bringing back a 14-day quarantine rule for returning travellers.
It was also reported last week that TUI is planning to close 166 of its stores across the UK and Ireland.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.
