Doric May Take Airbus A380s Early in Deals With Existing Users
Doric Asset Finance Ltd., which ordered 20 Airbus SAS A380 superjumbos last month, may take its first planes early to satisfy demand from existing operators.
As carriers including Malaysian Airline System Bhd. (MAS) and Thai Airways International Pcl (THAI) consider boosting their A380 fleets, Doric may take jets in 2015 and lease them to operators, Paul Kent, the Dublin-based aircraft lessor’s chief commercial officer said today in London.
“There is quite some demand for the 2015 slots,” he said at an Ascend Advisory conference. “We might accelerate some of slots in order to satisfy demand.”
Doric and Nimrod, a specialist investment fund, have built a business on financing A380s for airlines including Emirates and Singapore Airlines Ltd. (SIA) before striking a deal to buy planes directly from Airbus at last month’s Paris Air Show. First deliveries are due from 2016 under an agreement that still needs to be finalized.
Early placement would be with existing users for which the cabin interior has been defined, Kent said. Talks are also progressing with multiple new superjumbo operators, he said.
Airbus, which is trying to sell at least 25 A380s this year, still has open production slots for its flagship plane in 2015. The manufacturer has booked no firm orders for the plane in 2013, though Deutsche Lufthansa AG (LHA) said it will take two more.
To secure the commitment, Airbus provided Doric with favorable terms including for so-called pre-delivery payments due to the Toulouse-based aircraft maker before the aircraft are handed over, Kent said. Those payments can require large cash outlays from buyers.
Airbus also provided fixed price guarantees to redo the cabin, Kent said, as it seeks to allay concern from a lessor about the high costs associated with changing the cabin interior on the highly bespoke aircraft.
Doric is in talks with investors to raise the equity financing for the leasing unit. Those discussions, mainly with long-term institutional investors such as insurance firms and sovereign debt funds, should be completed before year end, Kent said.
Although all Doric deals currently involve A380s, Kent said he would “gladly” finance other wide-bodies. Those deals would be contingent on working with financially strong airlines, he said.
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