Finnair has announced it has finalised a sale-and-leaseback financing agreement for its latest Airbus A350 aircraft delivery with JLPS Holding Ireland.
Under the new agreement with JLPS, Finnair will assign the purchase of the Airbus A350 aircraft to the third party, and then lease the aircraft back for its own operation.
The aircraft is expected to be delivered to Finnair in the second quarter of 2022. The operating lease period is a minimum of 12 years, including a storage period expected to commence in the fourth quarter of 2021, concurrent with the aircraft‘s sale.
The total positive cash effect of the arrangement for Finnair in 2021–22 is in excess of US$100 million, compared with a situation in which the aircraft had been purchased and owned by Finnair.
Finnair has ordered a total of 19 new A350-900 XWB aircraft from Airbus, of which 16 have been delivered as of 1 September 2020; the aircraft concerned will be the 17th.
The remaining two A350 aircraft are expected to be delivered in the fourth quarter of 2024 and the first quarter of 2025.
Meanwhile, has also revealed its intentions to dismantle and recycle an Airbus A319 aircraft, which has reached the end of its economic life cycle at 21 years.
The dismantling will begin at Helsinki Airport, where Finnair’s mechanics will remove parts that can be used elsewhere in Finnair’s fleet.
These include the engine, seats, landing gear, and avionics components.
“This is the first time that a Finnair aircraft is dismantled and recycled in Finland. We made the decision to take the plane apart at our home hub to optimize sustainability and economics,” said Juha Ojala, vice president of Finnair’s technical operations.
“This project allows us to improve the cost-efficiency of maintenance operations and employ our mechanics during the pandemic when their normal workload has decreased.”
Before this, Finnair’s aircraft have been recycled elsewhere in Europe when they’ve reached the end of their life cycle. Most companies that do this type of work are located in dry zones, where the climate is favourable for the long-term storage of aircraft.
This is the first time that a commercial aircraft will be dismantled in Finland. It’s an unusual project for Finnair, as it’s different from the company’s normal maintenance work, especially when it comes to planning and project management.
Aircraft have a pre-determined maximum service goal, as the body of the aircraft can only handle a set number of pressurisations. After this, the aircraft needs to be taken out of use in accordance with the manufacturer’s instructions. The recyclability of the aircraft and its parts is considered already at the design phase. As much as 98 per cent of a new aircraft can be reused and recycled. With older aircraft, like the A319, about 90 per cent can be reused.
“Many parts of the plane that will be dismantled – like landing gear, engines, the auxiliary power unit, and avionics – can be utilized in Finnair’s maintenance operations, which supports both sustainability as well as cost efficiency,” Ojala explains.
“The parts that will be reused will be carefully inspected and overhauled. Smaller elements, like seat covers or cabin curtains, can also be reused.”
Reporting by Airlinerwatch.
