Deutsche Bank finances first ever green-funded aircraft deal
First green financing of a commercial aircraft leads the way for more sustainable financing activity in aviation
THE world’s leading regional aircraft manufacturer, ATR, on December 19 delivered the first ever green financed aircraft to Swedish regional airline Braathens Regional Airlines (BRA). The aircraft is leased from Avation, an aircraft leasing company headquartered in Singapore, and is financed by Deutsche Bank.
The aircraft is part of a new order for five 72-600s, all purchased by Avation from ATR and leased to BRA. Upon completion of the order in early 2020, the airline will itself operate an entirely ATR fleet, comprised of 15 ATR 72-600 aircraft.
Vigeo Eiris, one of the world’s leading independent agencies providing Environmental, Social and Governance (ESG) ratings, expressed the opinion that the project of replacing ageing regional jets with new ATR 72-600 aircraft is aligned with the Green Loan Principles established by the Loan Market Association in 2018.
This first ever green financing of an aircraft confirms the high sustainable value of the modern ATR turboprop aircraft. The ATR 72-600 aircraft has a significant environmental advantage over regional jets and other turboprops emitting 40% less CO2. Turboprops are more efficient than jets on short sectors as they accelerate air using less power, so use less fuel.
BRA CEO Geir Stormorken says his company has made a commitment to reduce their environmental impact and the ATR is an essential part of their strategy. “With that as a goal, it simply makes sense to choose the most efficient aircraft,” he says. “By replacing parts of our existing fleet of regional jets with ATR 72-600 aircraft, we will emit 7,500 fewer tonnes of CO2 per aircraft, per year.”
Avation executive chairman Jeff Chatfield points out that it is essential for the company, as a lessor, to progress their fleet into new technology low carbon emission aircraft such as the ATR 72-600, which maintain their value over a long period. He adds: “BRA’s decision to consolidate their own operation around the ATR 72-600 aircraft type demonstrates their understanding of the regional aviation market and the importance of reducing carbon emissions.”
Richard Finlayson, head of global transportation finance for Asia at Deutsche Bank, says the first green financing of a commercial aircraft hopefully will lead the way for more sustainable financing activity in aviation, and increased adoption of lower carbon emission aircraft across the industry to help make flying more eco-responsible.
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