German airline TUI (TUI.L) said on Monday that it had signed a sale and leaseback deal for five new Boeing 737 MAX aircraft, in a move that will raise $226m (£173m) to bolster its balance sheet during the coronavirus pandemic.
The airline said that the deal, which it made with Asian aircraft leasing company BOC Aviation, formed part of its “asset right” strategy, which will see it sell its own assets to reinvest in new ones.
TUI said that the deal, which was made on standard commercial terms, would create a lifetime lease obligation of about €223m (£201m, $262m).
The airline said that it expected to sign further financing deals on aircraft deliveries in the future.
BOC Aviation has said that it remains confident about the Boeing 737 MAX aircraft, which faces severe regulatory hurdles following two deadly crashes involving the plane.
The aviation industry is confronting an unprecedented crisis in coronavirus, as airlines and manufacturers face a collapse in demand from travellers.
TUI signalled in May that it expected to axe around 8,000 jobs and that it needed to trim costs by up to 30% because of the pandemic.
TUI’s move comes after the owner of British Airways last week announced plans for a rights issue of up to €2.75bn (£2.5bn), warning that the airline industry will take years to recover from the coronavirus crisis.
International Airlines Group (IAG.L), which also owns Iberia and Aer Lingus, revealed the fundraising measures as it also posted losses in both the second quarter and first half of the year.
Meanwhile, British Airways pilots last week voted to accept a package that will temporarily cut jobs and pay to avoid a larger number of redundancies. The British Airline Pilots Association said its members voted by 85% in favour of the deal.
There will be around 270 jobs axed and temporary pay cuts starting at 20%, the association said.
UK airports are set to lose at least £4bn in revenue this year due to the pandemic.
Karen Dee, chief executive of the Airport Operators Association (AOA), said demand would not reach pre-pandemic levels for a “considerable period” despite a gradual easing of travel restrictions worldwide.
Airport companies are calling for more UK government support, including a suspension of air passenger duty, wage subsidies after the furlough scheme ends in October, and relief from business rates similar to hospitality and retail firms.
Separately, think tank the New Economic Forum warned that as many as 70,000 jobs linked to the aviation industry were at “immediate” risk due to the coronavirus pandemic.
The think tank compared the expected collapse in aviation employment with the rapid decline of the UK coal industry in the early 1980s, which left lasting economic scars on many communities.