GGAM: Purchase and Leaseback of two A321neos with Viva Aerobus

LONDON – Griffin Global Asset Management (Griffin) announced last week the transaction of purchase and leaseback of two Airbus A321neo aircraft with Viva Aerobus, a low-cost airline based in Mexico.

The planes are scheduled to be delivered to the Viva Aerobus airline in late September this year.

“We are pleased to support the growth of Viva Aerobus by financing these two new A321neos. Viva continues to deliver a leading product in the Mexican market, and these aircraft will help expand their route network going forward”, said Michael Lombardi, Vice President of Marketing at Griffin.

It’s worth adding that this is not the only deal between the two companies this year.

Earlier this year, Griffin announced the purchase and leaseback of three Airbus A320neo aircraft with Viva Aerobus.

These planes are scheduled to be delivered to the Viva Aerobus airline in the first half of 2023.

“We are very excited to receive two more Airbus A321neo. Thanks to partners such as Griffin, our growth strategy continues firmly to open new nonstop services operated with state-of-the-art aircraft, low fares, and unmatched service. Viva has the most modern fleet in Mexico and the 3rd youngest fleet in North America “, mentioned Juan Carlos Zuazua, CEO of Viva Aerobus.

Sale and leaseback – a convenient way to raise capital

Under a sale-leaseback arrangement, the aircraft owner sells the aircraft to the lender or lessor, who then immediately leases the aircraft back to the original owner.

There will be no interruption or disruption of aircraft operations, but the transaction should give the company some extra cash. There also may be changes concerning taxes and the way in which the aircraft is accounted for on the company’s balance sheet.

A sale-leaseback gives you greater flexibility to control the tax consequences of aircraft operations. Leasing may help reduce or avoid liability for Alternative Minimum Tax because leasing generally does not generate tax preference items.

63 aircraft and counting

Viva Aerobus is Mexico’s ultra-low-cost airline. Carrier has democratized the airline industry with the lowest fares in Mexico and the lowest cost structure in America.

The airline started operations in 2006, and today it operates one of the youngest Latin American fleets with 64 Airbus aircraft: 20 A320, 20 A320neo, nine A321, and 14 A321neo.

Right now, the carrier has 35 Airbus: three A320neo and 32 A321neo on order with deliveries in the years 2022 – 2026.

Strong statistics in August 2022

The Mexican airline announced its August 2022 traffic results.

That month carrier passenger traffic increased by 35.0% to 1.88 million passengers compared to August 2021, mainly driven by an increase of 40.4% in domestic traffic.

Load factors increased 7.2 p.p. to 85.7% compared to 2021, reflecting 86.7% and 81.1% load factors in domestic and international, respectively.

As a result, Viva Aerobus grew its total capacity, measured in available seat miles (ASMs), by 26.3% compared to August 2021. Domestically, Viva grew its capacity by 29.4% and by 12.8%, internationally.

To date (January-August), Viva’s traffic reached 13.26 million passengers, a 40.8% increase compared to 2021, with load factors increasing from 3.3 p.p. to 86.4%.

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