Icelandair has entered right into a sale-leaseback settlement with a subsidiary of Atlas Air Worldwide Holdings (NASDAQ: AAWW) which recycles two Boeing 767-300 passenger planes into freighters for the cargo division and gives monetary help to the corporate. The airplane will substitute two all-cargo Boeing 757-200s that the airline plans to decommission in 2023 and 2024, he mentioned in a press release on Wednesday.

Titan Plane Investments, the three way partnership between Atlas’s rental subsidiary, Titan Aviation Holdings Inc. and Bain Capital Credit score, mentioned it has bought the 767s from Icelandair and leased them as soon as they’re modernized to hold cargo throughout the bridge. principal.

A sale-leaseback permits a enterprise to boost capital by promoting an asset after which renting it out to the customer for revenue.

Airways are accelerating the retirement of older passenger planes, specializing in extra environment friendly fashions, as they restructure into smaller firms primarily based on market situations. Phrases of the Titan deal weren’t disclosed, however Icelandair mentioned the sale was serving to its liquidity.

Icelandair mentioned the lease interval for every plane was 10 years. Conversion work will start subsequent spring and the freight jets are anticipated to enter service in September 2022. By then, they may function in Icelandair’s passenger community and in constitution type.

“We’re very happy to companion with Titan Plane Investments and Atlas Air to additional strengthen our freight enterprise. With the outlook nonetheless optimistic for cargo operations after COVID, I’m assured that the 767-300ER freighters will enable us to maximise new alternatives in our markets, ”mentioned Bogi Nils Bogason, President and CEO of Icelandair Group , in a press launch. “These planes carry roughly 50% extra cargo than our two present B757-200 cargo planes and match very properly into our present fleet and community. Our aim is to extend the capability of our markets, in addition to to strengthen the ‘Iceland as a freight hub, as is our passenger hub which affords enticing connections between continents. ”

Contemporary fish is likely one of the principal markets supported by Icelandair Cargo. Final April, the airline eliminated seats from three 767s to assist DB Schenker and different clients transfer bigger quantities of pressing medical provides world wide.

Icelandair is the newest passenger airline to put extra emphasis on cargo operations. Many airways have quickly deployed passenger planes on freight-only routes to benefit from excessive demand and yields, whereas passenger exercise is depressed as a consequence of COVID journey restrictions. However planes can shortly return to common service because the journey market improves.

Nevertheless, some airways are making extra everlasting freight commitments. Air Canada not too long ago launched an initiative to rework some 767s into freighters for its personal use, relatively than simply promoting them on the used plane market. Different carriers, equivalent to Air Belgium, SmartLynx, Solar Nation and Mesa Airways, have added freighters to their operations for the primary time. German leisure provider Condor not too long ago put a few of its passenger planes into service on scheduled routes for DHL Categorical below a short-term contract.

Titan Plane Investments now has three plane in its portfolio, together with a Boeing 777-200 freighter. The three way partnership was fashioned on the finish of 2019, with Bain Capital taking the lion’s share of the preliminary funding of $ 400 million.

Titan Aviation, the Atlas freighter, owns 21,767-300 Prolonged Vary plane.

Dry leased plane characterize lower than 15% of the mother or father firm’s income. It additionally owns Atlas Air and Southern Air, and is a majority proprietor of Polar Air Cargo, all of which function planes on behalf of different airways, or charters for logistics firms, constitution brokers and governments.

Click on right here for extra FreightWaves / American Shipper tales by Eric Kulisch.

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