Qatar Airways Group has signed its first Japanese Operating Lease with Call Option (JOLCO) financing agreement covering three Boeing 787-9 Dreamliner aircraft. The transaction was negotiated with the support of HSBC and JP Lease Products & Services Co., Ltd. (JLPS) and marks the Group’s entry into Japan’s aircraft financing market. HSBC acted as debt arranger and sole lender to the transaction and JLPS arranged and underwrote the equity component of the deal.
The deal marks the first of three planned transactions under Qatar Airways Group’s inaugural Japanese JOLCO programme which is designed to cover seven aircraft in total. JLPS will act as equity arranger across the programme. The initiative will expand the airline’s financing options and strengthen relationships with financial partners in Asia as the company prepares to meet future aircraft investment and fleet requirements.
Japanese Financing Deal Expands Qatar Airways’ Funding Options
The Japanese Operating Lease with Call Option (JOLCO) transaction represents a significant milestone in Qatar Airways Group’s efforts to diversify funding options and access international investment markets. Japan’s aircraft financing market offers access to investors who are willing to support established airlines with strong credit profiles. With this deal, Qatar Airways Group becomes the first to secure its first agreement of this type in Japan and has the opportunity to diversify its investor base and establish a new channel for funding its future aircraft acquisitions.
Hamad Al Khater, Chief Executive Officer of Qatar Airways Group, said that the airline views the JOLCO market as a strategic, long term source of funding and that the transaction gives the airline access to Japanese capital on attractive financial terms, while helping the group satisfy its future fleet financing needs efficiently and competitively. The airline looks to continue to have a presence in the market as it pursues future investment and growth opportunities.
HSBC and JP Lease Support Landmark Transaction
HSBC played a central role in structuring the financing, acting as debt arranger and sole lender to the transaction. The bank’s participation demonstrates the bank’s longstanding strategic relationship with Qatar Airways Group and its ability to offer tailored financing solutions for the aviation sector. The arrangement offers the airline access to international capital markets and supports its efforts to meet aircraft investment requirements.
JP Lease Products & Services Co., Ltd. arranged and underwrote the equity component of the transaction. The President and Chief Executive Officer, Teiji Ishikawa described how Japanese investors assess the credit strength of an airline when considering such investments and was pleased to have Qatar Airways enter the market. He described the agreement as the beginning of a longer term program, rather than an isolated transaction, and expressed the company’s intent to continue to support the airline in Japan.
Boeing 787-9 Fleet Investment Supports Airline Growth
The agreement covers three Boeing 787-9 Dreamliner aircraft which are part of the widebody aircraft family used by airlines to support long haul international operations. With the financing for these aircraft secured through a Japanese JOLCO structure, Qatar Airways Group has an additional option for funding its fleet, while diversifying the sources of capital available to the business. The transaction also sets the scene for further financing activity under the planned programme covering seven aircraft.
As Qatar Airways Group continues to develop its fleet and international network, access to different financing markets can help it meet capital requirements and support long term operational plans. The airline’s newly acquired relationship with Japanese investors and financing partners is likely to contribute to that strategy. The agreement also demonstrates the role of international banks and specialised leasing companies in helping airlines to finance aircraft and pursue future growth.
