LIAT is now leasing two of the ATR aircraft it sold in a deal that its Chief Executive Officer David Evans has described as a routine maneuver in the aviation industry.
The company finalised the sale of its second ATR-42 airplane after it obtained approval from the Caribbean Development Bank, which financed its re-fleeting exercise about two years ago.
Of the nine ATR aircraft it operates, LIAT leases six and the recent sale means that it owns only three of the new planes.
“There is a transaction in the airline industry known as a sale and leaseback where you sell an aircraft and lease it back from a leasing company,” Evans advised.
He said the sale allows LIAT “to raise some capital for the business and you still keep the aircraft.”
Evans did not disclose how much capital LIAT raised from the sale, but said there are benefits of leasing because “if markets change and new aircraft come on the market, a new leased aircraft can be returned.”
When asked why LIAT chose to sell the ATR so soon after securing a loan to purchase it, the CEO said, “markets and situations change and you always look for a balanced portfolio in your fleet.”
Evans said the airline does not intend to sell any more of its ATRs, and added that LIAT would still be responsible for maintaining those it currently leases.
News that the two planes were sold comes just one week after the company shifted another ATR aircraft from Antigua to Barbados in what Evans described as a strategic move.
In 2013, the airline received delivery of its first ATR 72-600 marking the start of its US $100 million re-fleeting exercise.
The programme has been blamed for the company’s continuing financial woes which includes late payment of salaries to staff.
Customers were told that the new fleet of planes which replaces the aging Dash-8 would result in lower airfares.
But LIAT has had difficulty returning the Dash-8 to the lessors after a fire gutted its hangar and destroyed crucial records in 2012.