Israir Acquires Airbus A320 for $17 Million as Part of Expansion Plan
Translated & summarized from Calcalist by baba
Israir is purchasing a leased Airbus A320-200 for $17.05 million as part of a strategic growth plan to expand its fleet and reduce reliance on leasing. The acquisition is expected to save the airline millions annually, though it requires significant engine maintenance costs in 2027. This move occurs as controlling shareholder Rami Levy also considers acquiring Arkia Airlines, potentially consolidating ownership of two Israeli carriers.
The story in 6 lines · by baba
- Israir will buy a leased Airbus A320-200 for $17.05 million, with the deal closing in November.
- The acquisition is expected to save Israir $3 million annually and increase profits by $1 million yearly.
- An additional $11 million is budgeted for engine maintenance in the first half of 2027.
- Israir aims to operate ten narrow-body, five wide-body, and two private jets by 2030.
- Controlling shareholder Rami Levy is also considering buying Arkia Airlines.
- The potential Arkia purchase could significantly alter Israel's aviation market structure.
Israir has announced its intention to purchase an Airbus A320-200 aircraft, which it currently leases under a long-term dry lease agreement, for approximately $17.05 million. The deal is expected to be finalized in November, with the aircraft leased to Israir until June 2030. The airline anticipates that acquiring the plane will save about $3 million annually in cash flow and boost profitability by up to $1 million per year in the coming years. However, the transaction also includes an additional expense for engine maintenance and overhaul, estimated at $11 million, scheduled for the first half of 2027. Israir plans to fund both the purchase and the engine work through its own resources and bank financing.
This acquisition is a component of Israir's strategic growth initiative, aiming to operate a fleet of ten narrow-body aircraft, at least five wide-body aircraft, and two private jets by 2030, with a target of transporting approximately 3.5 million passengers annually. The company seeks to expand its operations and reduce its reliance on aircraft leasing, a significant cost factor for airlines.
The move aligns with the expansion plans of Israir's controlling shareholder, Rami Levy, in the aviation sector. Levy recently expressed interest in exploring the acquisition of Arkia Airlines, following an approach from the Nakash brothers, Arkia's owners, who are facing financial difficulties. Such a deal could reshape the Israeli aviation market, potentially placing Levy at the helm of two domestic airlines amidst industry challenges like fluctuating demand, high fuel costs, security constraints, and foreign competition.
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