Air India and Willis Lease Ink Historic agreement ConstantThrust® Engine Sale & Leaseback
National, September 22, 2022: Air India has signed a definitive sale and lease back agreement with Willis Lease Finance Corporation (NASDAQ: WLFC) for 34 CFM56-5B engines installed on its Airbus A320 family fleet.
The engines will be covered under Willis Lease’s ConstantThrust® program, which will deliver significant relia bility and cost savings versus a traditional MRO shop visit program. This is the first ConstantThrust® sale and leaseback agreement for aircraft engines by any Indian carrier.
Under the sale side of the transaction, Willis Lease will purchase from Air India 34 engines powering 13 Airbus A321 aircraft and 4 Airbus A320 aircraft. Through ConstantThrust®, Willis Lease will provide replacement and standby spare engines, allowing Air India to avoid potentially costly and unpredictable shop visits on engines po wering a transitioning aircraft fleet. Willis Lease will also have an in-country team to co-ordinate and manage t he entire programme and all logistics and transportation involved.
Headquartered in Florida, USA, Willis Lease is a leading global aviation finance company, specializing in the leas e, finance and management of aircraft, spare commercial aircraft engines and auxiliary power units. Constan tTh rust® leverages those capabilities and Willis Lease’s spare parts, engine and aircraft technical management servi ces, as well as its aircraft engine maintenance, repair and overhaul (MRO) services, to deliver programmatic sup port to airlines and lessors worldwide.
Speaking on the agreement, CCO of Air India, Mr. Nipun Aggarwal said, “This is a very unique and landmark tra nsaction which will enable Air India to eliminate the maintenance burden and fully de-risk itself from the main tenance cost uncertainty associated with the engines which were not covered under any “Power By The Hour” program with the OEMs. This transaction will allow Air India to derisk itself operationally, improve fleet relia bility, reduce cost, and optimize cash flows.”
“Air India ran a rigorous process to evaluate all options for managing the substantial maintenance, operational risk and logistical burden these engines would have created, and we are proud that all the benefits of Constan tThrust® rose to the top in the end,” said Brian R. Hole, President of Willis Lease. “Air India’s selection of Consta ntThrust® validates our longstanding belief that traditional options are not the only options for airlines willing to spend the time to fully investigate the benefits of our programmatic solutions.”
About Air India:
Founded by the legendary JRD Tata, Air India pioneered India’s aviation sector. Since its first flight on October 15, 1932, Air India has an extensive domestic network and has spread its wings beyond to become a major intern ational airline with a network across USA, Canada, UK, Europe, Far-East, South-East Asia, Australia and the Gulf. Air India is a member of Star Alliance, the largest global airline consortium. After 69 years as a Government-own ed enterprise, Air India and Air India Express were welcomed back into the Tata group in January 2022. The present management at Air India is driving the five-year transformation roadmap under the aegis of Vihaan.AI to establish itself as a world-class global airline with an Indian heart.
Vihaan.AI, derived from the Sanskrit for “Dawn of a New Era”, is Air India’s five-year transformational roadmap. Supported by five pillars, multiple workstreams and spanning three phases over five years, Vihaan.AI will see dramatic growth in Air India’s network and fleet, a completely revamped product and customer proposition, and much-improved reliability. The airline will also take a leadership position in technology, sustainability and innov ation, while aggressively investing in the best industry talent. Vihaan.AI is aimed at putting Air India on a path to sustained growth, profitability and market leadership, and restoring the airline to the heights of global aviation.
About the Tata Group:
Founded by Jamsetji Tata in 1868, the Tata group is a global enterprise, headquartered in India, comprising 30 companies across ten verticals. The group operates in more than 100 countries across six continents, with a mis sion ‘To improve the quality of life of the communities we serve globally, through long-term stakeholder value creation based on Leadership with Trust’.
Tata Sons is the principal investment holding company and promoter of Tata companies. Sixty-six percent of the equity share capital of Tata Sons is held by philanthropic trusts, which support education, health, livelihood gen eration, and art and culture. In 2020-21, the revenue of Tata companies, taken together, was $103 billion (INR 7.7 trillion). These companies collectively employ over 800,000 people. Each Tata company or enterprise oper at es independently under the guidance and supervision of its own board of directors. There are 29 publicly-list ed Tata enterprises with a combined market capitalisation of $314 billion (INR 23.4 trillion) as on December 31, 20 21. Companies include Tata Consultancy Services, Tata Motors, Tata Steel, Tata Chemicals, Tata Consumer Pro ducts, Titan, Tata Capital, Tata Power, Tata Communications, Indian Hotels, Tata Digital and Tata Electronics.
About Willis Lease Finance Corporation:
Willis Lease Finance Corporation leases large and regional spare commercial aircraft engines, auxiliary power units and aircraft to airlines, aircraft engine manufacturers and maintenance, repair and overhaul providers in 120 countries. These leasing activities are integrated with engine and aircraft trading, engine lease pools and as set management services supported by cutting edge technology through its subsidiary, Willis Asset Manage me nt Limited, as well as various end-of-life solutions for engines and aviation materials provided through its subsi diary, Willis Aeronautical Services, Inc. Except for historical information, the matters discussed in this press rele ase contain forward-looking statements that involve risks and uncertainties. Do not unduly rely on forward-loo king statements, which give only expectations about the future and are not guarantees. Forward-looking statem ents speak only as of the date they are made, and we undertake no obligation to update them. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include, but are not limited to: the effects on the airline industry and the global economy of events s uch as war, terrorist activity and the COVID-19 pandemic; changes in oil prices, rising inflation and other disru ptions to world markets; trends in the airline industry and our ability to capitalize on those trends, including gr owth rates of markets and other economic factors; risks associated with owning and leasing jet engines and airc raft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; changes in interest rates and availability of capital, both to us and our cus tomers; our ability to continue to meet changing customer demands; regulatory changes affecting airline oper ations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio; and risks detailed in the Company’s Annual Report on Form 10-K and other continuing reports filed with the Securities and Exchange Commission.
