Southwest Airlines sells 3 planes for $104 million, then leases them back
Thursday May 21, 2009, 3:25 pm EDT
DALLAS (AP) -- Southwest Airlines Co., trying to pad its cash balance amid a downturn in travel, said Thursday it sold three planes for $104 million and leased them back.
It was the second such transaction in just over a month at Dallas-based Southwest, bringing to six the number of planes it has sold.
Southwest said in a filing with the Securities and Exchange Commission that on Tuesday it closed a sale-leaseback deal with a third party aircraft lessor involving three Boeing 737-700 jets. It immediately leased the planes back for 16 years.
Southwest said it will make monthly payments of about $4.4 million for the first six months of the leases. It didn't identify the lessor in the transaction.
The low-fare airline had a string of profitable quarters from 1991 until last year, the longest streak in the U.S. airline industry. But it has lost money the last three quarters, with falling traffic hurting its results so far in 2009.
Airlines have had a difficult time borrowing money to finance aircraft purchases and other purposes. The chief executive of American Airlines parent AMR Corp. said, however, that the credit squeeze seems to be easing.
Southwest shares fell 18 cents, or 2.6 percent, to $6.75 in afternoon trading.