Leading lessor AWAS is stepping up its activities in Latin America, signing a variety of network, medium-sized and low-cost carriers. Mark Pilling reports
AWAS is increasing its footprint in the Latin market via innovative leasing deals with carriers such as Brazil's Gol and Chile's LAN that allow fleet updates while simultaneously replacing older types.
Its latest deal has seen it work with LAN to couple a purchase and leaseback of five Airbus A320s for delivery to the Chilean carrier with AWAS redeploying several LAN Boeing 737-700s to other airlines. "There are very few players active in the Latin market that have the ability to customise solutions like this," says Doug Winter, head of sales at the Dublin-based lessor. "With this deal we created a value that was even more compelling for the customer."
This is the second major deal AWAS has secured with this approach in recent times. "Gol came to us in late 2010 and said 'we've got a challenge'," says Walter Valarezo, managing director Americas for AWAS. The carrier was refocusing its strategy to concentrate on short- and medium-haul flying, making several 767s, leased from AWAS, surplus to requirements.
Gol had inherited the 767s after buying Varig. It had flown them on long-haul routes to Europe and elsewhere but pulled off those routes in 2008.
"We were able to get the 767s out and redeploy them. At the same time, we secured purchase and leasebacks on five 737-800s Gol had on order from Boeing," said Valarezo. For the record, the 767s went to Israel's El Al and Russian carrier Nordwind Airlines.
AWAS says it is one of the few lessors with the breadth of fleet types in its 200-aircraft strong portfolio to structure these kinds of deals. "With a mixed fleet of 100-seaters to 400-seaters, from new generation to mature types, and our pipeline of new deliveries, we can design very innovative solutions as opposed to responding to a single-point requirement," says Winter.
AWAS, which ranked ninth in the annual Airline Business lessor ranking by fleet size and value, has substantially increased the number of aircraft placed in Latin America in the past few years, says Winter. It now has 34 aircraft leased across the region with more arriving nearly every month or so.
But Latin America has not always been a happy place for lessors. Like several other players, AWAS had exposure to Varig's bankruptcy process in 2007, which caused some lessors and banks to subsequently pull out of the Brazilian market.
AWAS chose to stay in Brazil and has built up a new range of customers, including Gol, TAM and Webjet, says Valarezo. "We made a conscious choice to look at this as an opportunity with different customers who would benefit from our approach. It is simply too big a market to ignore."
The Latin American market has embraced leasing as a method of financing aircraft in a big way, which creates many opportunities. "Some 44% of the fleet in this region is financed through operating leases," said Valarezo. In comparison, North American carriers have just 22% of their fleets on operating lease.
Other recent deals by AWAS in the region have seen it place a second 737-300 with new player Boliviana, which is serving the domestic market in Bolivia. In Mexico, VivaAeroBus, a low-cost carrier based in Monterrey, took its fourth 737-300 from AWAS in October.
Source: Flight Daily News
