U.S. fund Castlelake to buy 25 planes from AirAsia for $768 million: Reuters

Malaysian budget carrier AirAsia Group Berhad (AIRA.KL) will sell a portfolio of 25 planes to U.S. private investment firm Castlelake LP for $768 million, it said on Monday.

Castlelake will also purchase four new aircraft that will be delivered to AirAsia in 2019, the airline said in a statement.

The 29 planes – Airbus’ A320-200ceo and A320neo – will be leased back to AirAsia.

Citing sources, Reuters reported earlier this month that Castlelake agreed to buy about 30 narrowbody aircraft from AirAsia.

The deal underscores the strong appetite of funds to invest in the aircraft leasing sector, which is seeing rising demand on the back of an increase in low-cost carriers and passenger traffic.

Castlelake, a global fund focused on alternative investments, has been stepping up its exposure to aviation assets. In June last year, it raised $1 billion from investors including family offices, sovereign wealth funds, endowments and pension funds.

For AirAsia, the deal marks another move to monetize its assets as Asia’s biggest budget airline seeks to transform itself into an asset-light, digitally focused firm. The carrier is cashing in on a booming leasing sector after ordering hundreds of Airbus SE (AIR.PA) planes at bargain prices in recent years to become one of Airbus’ biggest customers.
AirAsia said some of the proceeds from the sale will be used to pay down debt.