Cathay in leaseback deal for 19 Boeing 777s with Bank of China unit

HONG KONG's Cathay Pacific has announced it has signed an agreement with the aircraft leasing company BOC (Bank of China) Aviation for the sale and leaseback of six of the 19 Boeing 777-300ER aircraft the airline has on order.

The aircraft are to be delivered between the fourth quarter of 2009 and the second quarter of 2011 said a Cathay statement, adding that this is the first time Cathay and BOC Aviation have worked together.

"This is a landmark agreement because it is the largest single lease-back arrangement we have entered into," said Cathay CEO Tony Tyler said.

"It is consistent with our cash-preservation priority during this difficult time, and dovetails with our long-term fleet management strategy to maintain an appropriate balance between owned and leased aircraft.

"Importantly, the arrangement will have no impact on our debt-equity ratio as there will be no need to raise finance for the purchase of these aircraft," he said.

Mr Tyler said Cathay has no intention to cancel aircraft orders. "However, we are in negotiation with aircraft manufacturers to defer some of our deliveries to align our capacity with expected demand," he said.

Cathay Pacific has 39 aircraft on order for delivery before 2013. At present, there are 122 aircraft in its fleet, 25 of which are leased. The remainder are owned by the airline, said the statement.

(Source:www.schednet.com)