Munich-based KGAL helped arrange three Japanese operating leases for Lufthansa last year, in spite of the difficult market conditions. The deals involved an Airbus A320ceo and two Airbus A321neos, KGAL said in an annual update published on February 18.
KGAL is a provider of aircraft funds, as well as other asset classes such as renewable energy and real estate. Aviation assets under management amount to approximately 1.8 billion euros (US$2.16 billion) as of December 31 2020. In addition to its work as a fund provider, KGAL has a long-established joint venture with Lufthansa, known as Lufthansa Leasing GmbH, which arranges structured financing for the airline's fleet.
Lufthansa likes to keep control of the residual value of its aircraft as they get older, and under the Japanese operating lease with call option (Jolco) the airline lessee has the right to acquire the aircraft at a fixed price at the end of the lease term.
Jolco investors are typically privately held small and medium-sized enterprises (SMEs) in Japan, which group together on deals for individual aircraft.
"These successes show that the Japanese market remains open with good opportunities," says KGAL, even though 2020 was described as "the darkest year in the history of aviation".
The list price for an A320ceo (current engine option) is around US$100 million. The list price for an A321neo new engine option is around US$130 million. However, very large customers such as Lufthansa would typically get a 50% discount on list prices.