Airbus Updates No.3906

 

SAS To Return An Airbus A330 And A320neo To Lessors

On Monday, SAS Scandinavian Airlines (SAS) petitioned a United States bankruptcy court to allow it to return two aircraft to lessors. The airline sought US Chapter 11 bankruptcy protection in July last year, and Monday's filing is another step in bringing the airline back to financial health.

As reported by ch-aviation.com, SAS has sought permission to return two Airbus aircraft, an A330-300 registered LN-RKR (manufacturer serial number 1660) and an A320-200neo registered SE-ROH (MSN 9173). The airline petitioned the US Bankruptcy Court for the Southern District of New York because the two aircraft were "now surplus to requirements."

To add some weight to the argument, Michael Cox, senior managing director of Seabury Securities LLC, said the two leases were at above-market rates, and the decision by the airline to reject them was "a sound business judgment." The filing noted that "The excess aircraft are no longer required in the debtors' restructured fleet," adding:

"Thus, requiring the debtors to retain the excess aircraft would impose unnecessary costs on the debtors' estates with little to no corresponding benefit. Accordingly, rejection of the leases constitutes a proper exercise of the debtor's business judgment as it will reduce costs for the debtors' estates. Therefore, the rejection of the leases should be approved."

The lessors have until January 23rd to file their reply, which will no doubt paint an entirely different picture of who will be out of pocket if the two aircraft are left at an airport to be picked up. The court's final decision is set to be handed down on February 1st.

Fleet data from ch-aviation.com shows that the Airbus A330 is 7.4 years old and on a financial lease from a Japanese special-purpose vehicle named JPA No. 137 Co Ltd. The A320neo is close to three years old and is on lease from AVIC International Leasing.

This week's filing also said that when SAS sought Chapter 11 protection, it operated a fleet of 100 aircraft, including 63 on operating leases, 15 subject to Japanese operating leases with a call option, two loan-financed and 20 aircraft owned by the airline. Current data shows that SAS is operating a fleet of 69 aircraft, with a further 61 wet-leased and 13 inactive.

Leaving the wet-leased and inactive aircraft aside, the operating fleet includes four Airbus A319s, 10 A320s, 32 A320neos, four A321s, three A321neos, six A330s and four A350s. SAS also has four Boeing 737-700s and two 737-800s. In September, the airline said it was rejecting ten leased aircraft, including three A320neos, one AA321, one 737-700, two A350s and three A330s.

Away from the bankruptcy court, SAS carried 1.47 million passengers in December, an increase of close to 50% compared to December 2021. The passenger load factor for December 2022 was 71.7%, significantly up from the 57.1% reported in December 2021. While the lawyers and accountants battle it out in Manhattan, SAS President and CEO Anko van der Werff said, "Continuing the positive trend observed during autumn, December traffic came in at 1.5 million passengers, an almost 50% increase compared to December 2021."

"We are concentrating on ramping up ahead of the expected busy summer season. During the month, we released our extended summer program, with 20 new routes and more than 5000 weekly flights to more than 100 destinations."