Regions

Airbus owners reach out future operators for Singapore Airlines’ planes

December 15
8:39 PM 2015

The owners of five Airbus A380s leased to Singapore Airlines Ltd, Dr. Peters Group and Doric, have begun seeking for potential future operators for the A380s as the Singapore Airlines is still evaluating whether to extend the leases.

The 10-year lease of five SE A380s will expire in 2017, and Singapore Airlines must decide by next September whether to renew the contract, according to Bloomberg.

Singapore Airlines ordered the Airbus' A380s in 2000 for $235 million each. Dr. Peters Group took over the aircraft seven years later in 2007 at a cost about $200 million a piece and began the 10 years leases.

Singapore Airlines is obliged to pay Dr. Peters $1.71 million per month per aircraft, or about $205 million over the 10 years lease per aircraft.

When the leases are expired, the Singapore Airlines is required to return the aircrafts in full life conditions, meaning that the aircrafts' parts including cabins, engines, and other elements must be like new when they are returned. If the aircrafts are handed back without being refurbish, the Airlines is obliged to pay up to $25 million for each plane.

This means, if Singapore Airlines decide not to retain the air crafts, it will have to pay Dr. Peters up to $125 million when it return the five A380s. Dr. Peters CEO Anselm Gehling said that this cost provides a strong incentive for the airlines to extend the leases.

While Singapore Airlines is still considering its choice, Dr. Peters is reaching out the potential future operators for the A380s. Gehling said that if the planes do become free, Turkish Airlines is a potential user.

The company is also reaching out the U.S. airlines that is considering to take the second hand air crafts in one or two years. Some Airlines from China and other parts of Asia may also look at the used A380s.

The Airbus Group's A380 has been awarded Best Aircraft Type by the U.S. publication Global Traveler, according to Daily Mail.

The award was based on the Global Traveler's readership vote as part of its 11th annual Tested Reader Survey Awards. The aircraft provides a typical capacity of 544 passengers in a four-class configuration.

Airbus Group is currently disposing of assets with combined revenues of around 2 billion euros ($2.2 billion), according to Reuters.  Airbus has delivered 176 units of A380s to 12 airlines around the world.

Airbus will provide Dr. Peters marketing assistance and customer contacts to help establish a second-hand A380 market if Singapore Airlines choose to return the planes.

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