First Financings of A380 Attracts Higher Than Expected Rentals & Pricing

First Financings of A380 Attracts Higher Than Expected Rentals & Pricing

Jan 21, 2008 (Aircraft Value News/Access Intelligence via COMTEX) -- SGPJF | news | PowerRating | PR Charts -- According to reports, Airbus Financial Services has sold the first aircraft to be operated by Singapore Airlines for a purchase price of $198.6 million, representing a higher than expected price.

The first three aircraft to be delivered to SIA have been bought by Doric Asset Finance. While the price of the first aircraft is reportedly $198.6 million, the implication is that the base purchase price of the second and third aircraft will be the subject of some small indexation change due to the date of delivery. The first aircraft, acquired from Airbus Financial Services due to pre-existing delivery to Singapore Airlines, has been financed under a 10-year German operating lease, subject to a two-year lease extension option.

The second and third have been acquired direct from Airbus S.A. There has been considerable variation in values attributed to the A380 with some sources indicating approximately $160 million while others suggest in excess of $200 million. The 2007 list prices averages $314.5 million, suggesting an approximate 37 percent discount. The price includes buyer furnished equipment, which for the A380 can run into many millions of dollars.

The reported lease rental is $1.7 million a month. This is higher than might be expected for a lessee of Singapore Airlines caliber but perhaps is appropriate to mitigate some of the uncertainty facing residual values of the early build A380s in the years to come. The fixed rate of $1.7 million per month will therefore generate more than $200 million over 10 years, allowing residuals to be flexible.

Aircraft Value News, Vol. 17, No. 2




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