Etihad Enters $1bln Aircraft Sale Deal with KKR, Altavair

Etihad Airways PJSC livery is seen on the company's first Airbus A380 aircraft during its unveiling at Airbus Group NV's paint plant in Hamburg, Germany, on Thursday, Sept. 25, 2014. Photographer: Krisztian Bocsi

Etihad Airways has signed an agreement with KKR, a leading global investment firm, and Altavair AirFinance (“Altavair”), a leader in commercial aviation finance to sell its some of its commercial aircraft.

The definitive agreement will see KKR and Altavair acquire Etihad’s aircraft portfolio including, the airline’s fleet of Boeing 777-300ERs and Trent powered Airbus A330-300s and A330-200s.

The transaction provides for the Boeing 777-300ERs to be leased back to Etihad upon purchase in early 2020, while the Airbus A330s will be delivered over the next 22 months and placed on lease with other international operators for either passenger operations or as converted freighters, according to a press statement.

Commenting on the investment, Dan Pietrzak and Brandon Freiman, Partners at KKR both said that they were thrilled to be working with Etihad and added, “Investments like this one are exactly what we hoped to embark on when we first established our partnership with Altavair, whose experience and expertise in the global aviation market has been invaluable.”

Altavair CEO Steve Rimmer also expressed his delight on the partnership with Etihad and hoped to play a major role in the repositioning 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.”

The acquisition, which will be made through aircraft leasing investment platform Altitude Aircraft Leasing, is said to fetch Etihad an amount of $1bln, according to media sources.

Tony Douglas, Group Chief Executive Officer, Etihad Aviation Group, said, “We’ve made great strides in optimising 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. The structure of this transaction also provides us with significant flexibility, meaning we are well placed to respond to future growth requirements.”

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