Israeli flag-carrier El Al has reached a sale-and-leaseback agreement with an unidentified foreign company covering three Boeing 737-800s.
The airline, which has been seeking to shore up its finances, says it signed a memorandum of understanding for the transaction on 23 April.
El Al has not identified the specific airframes involved but says they were manufactured in 2009.
Cirium fleets data lists the airline as having three owned 737-800s from that year – 4X-EKH, 4X-EKJ and 4X-EKL – which were all originally ordered by Air Europa before being delivered new to the Israeli operator.
The aircraft will be sold for a total of $76 million and leased back to the carrier for eight years.
El Al says it will deposit $21 million of this sum with the buyer in order to cover maintenance and refurbishment work during the lease period.
About 75% of this deposit, it adds, will be “gradually” returned to the airline by the end of 2021, depending on the level of repair required for the jets’ CFM International CFM56 engines. The balance will be repaid by 2026.
El Al says it is carrying out the sale as part of measures to deal with the impact of the coronavirus outbreak on its financial position.
But it points out that the 737 transaction is subject to a number of conditions set out in the memorandum, including obtaining support from the government and the release of the aircraft from current liens.
“Completion of the transaction under [these and other] conditions is uncertain at this time,” it says, adding that completion would be recognised in accounts through a capital pre-tax loss of $3.7 million.
