Abu Dhabi: Kuwait-based Jazeera Airways announced on Thursday the sale of 15 Airbus A320 aircrafts owned by the group’s Sahaab Aircraft Leasing for $507 million (Dh1.8 billion).
The transaction will result in additional cash surplus of $81.8 million. It will also lift Jazeera Airways Group’s cash balance to just over $279 million in 2015, making it debt-free, the airlines said in a statement.
The buyer is a joint venture between Investec Bank and Chow Tai Fook Enterprises Limited.
The sale is part of a strategic shift to a leased aircraft operation, and a focus on the passenger airline business.
“The move to divest from the leasing business, though profitable, by selling our fleet and continuing with a leased-aircraft operation was a strategic decision to enhance the airline’s business model and focus on future growth opportunities, boost shareholder value and enhance return on equity,” said Marwan Boodai, chairman of Jazeera Airways Group.
The sale proceeds will be reflected in the group’s financial statements for the fourth quarter of 2014.
The group is expected to register a non-recurring net loss of $11.2 million for financial year 2014 as a result of the difference between the sale value and the book value of the aircraft portfolio.
Profit from the passenger airline business is expected to continue to grow in 2015.
The group had earlier announced $45.3 million in net profit for the nine-month period ending on September 30, 2014. The passenger airline business contributed to $36.2 million in net profit for the same period, while the leasing business contributed to $9.1 million.
