Croatia Airlines considering financing options for A220 order
Financing models for the acquisition of six Airbus A220-300 aircraft are still under consideration, Croatia Airlines has told EX-YU Aviation News. Delivery of the jets is due to commence in 2024. Potential financing options include an operating lease, finance lease, as well as sale and leaseback agreements. The A220-300 aircraft is valued at approximately 91.5 million US dollars per unit at list price, before the customary discounts, bringing the Croatian carrier’s order for six to over half a billion dollars at list price. The airline also has plans to lease an additional nine A220 jets in order to operate a single-type fleet by 2026. The pace of deliveries over the two-year period has not been made public.
The exact details of Croatia Airlines’ contract with Airbus remain largely unknown after the order was firmed up in Zagreb last week without the presence of any members of the press. However, it is believed the Croatian carrier received extremely favourable terms from Airbus. The airline has also converted a historic ten-million-dollar deposit it made to the European plane manufacturer, for a 2008 aircraft order that never materialised, reducing the overall price tag of the A220 acquisition. Furthermore, the carrier is believed to be leaning towards an operating lease of the aircraft for a period of twelve years with an option of extending it for a further twelve.
Croatia Airlines has been negotiating its fleet renewal with manufacturers for over a year, with three plane makers submitting their offers to the national carrier. They included Airbus, Embraer and Boeing, although the latter dropped out of the race early on. The carrier opted for the A220 due to favourable terms, as well as crew and maintenance commonality with its current fleet. Late last year, Croatia and France inked a strategic partnership agreement, with Croatia becoming France’s privileged partner. The A220s are expected to reduce Croatia Airlines’ operating costs as well as improve the company’s environmental efficiency and competitiveness while improving passenger comfort.
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