Finnair Prepares Ground for Long-Haul Fleet Renewal

Finnair has sold its oldest MD-11aircraft and leased it back for a little over six years. This is the second such deal within a month. The combined sale price of the two aircraft is approximately 70 million dollars. The deal will have a positive effect of 13 million euro on the first quarter result for the 2003 financial year. The arrangements enable Finnair to plan the retirement of its long-haul MD-11s at the end of the decade.

The use of sale and leaseback transactions is part of the risk management of the resale value of the fleet. At the end of the 1990s, Finnair reorganised its MD-80 aircraft ownership by selling 13 aircraft and leasing them back during several years.

"The excellent timing of our previous decisions is especially highlighted now that after the events of September 11th 2001 the resale value of many aircraft  types has plummeted," says CFO Petri Pentti.

In spring 2003, the company will lease one additional MD-11, increasing the number of MD-11s to five. The additional capacity is directed mainly at the growing Asian market.

Finnair has also sold two 123-seater DC-9s to the Guatemalan Tikal Jets Airlines. The company's goal is to retire all its DC-9s this year and renew the fleet with Airbus A320 aircraft.

"Airbuses are much more environmentally friendly than the DC-9s which have older technology. We have also received positive feedback from our clients on the new Airbuses. By the end of the year, we will be flying 24 Airbus aircraft," Petri Pentti explains.