Advancing the Growth and Development of Turkish Airlines
In a significant move, CIB, a global leader in banking services, has played a pivotal role in aiding Turkish Airlines in its quest to rejuvenate its fleet with fuel-efficient aircraft. The aim is to reduce the carbon footprint per mile flown, demonstrating a commitment to sustainability.
Jean Chedeville, Global Head of Aviation at CIB, and Deniz Billion, Executive Director of Aviation Finance for EMEA, have been instrumental in this operation. CIB has extensive experience arranging JOL/ JOLCO structures for major airlines, and their expertise was once again on display in this transaction.
The financing for Turkish Airlines is structured as a JOLCO with the Balthazar insurance product. This complex structure optimizes the overall cost of borrowing for Turkish Airlines, providing a 100% financing solution. The Balthazar insurance, which serves as a credit enhancer to the senior lenders, was first introduced by CIB in 2019, with Turkish Airlines being the launching customer of this guaranteed aircraft financing product.
Deniz Billion was involved in arranging this transaction for Turkish Airlines. CIB acted as the lead arranger and debt underwriter for this delivery, integrating the financing and equity components. The JPY denominated senior debt was underwritten by CIB for this transaction.
The deal marks a significant milestone for both parties. Turkish Airlines received delivery of one Airbus 350-900 aircraft, a testament to the successful collaboration. CIB takes pride in standing alongside Turkish Airlines as they embark on this new phase of expansion.
To further strengthen its commitment to offering Japanese-linked solutions to clients, CIB opened a new branch in Tokyo in 2023. Turkish Airlines is a prestigious client for CIB's aviation franchise, and this partnership underscores the bank's dedication to supporting its clients in their growth journeys.
Looking ahead, Turkish Airlines aims to double its fleet to reach 800 aircraft in the coming decade. The advantage of this hybrid structure for Turkish Airlines is that it allows them to combine the strengths of different organizational forms, enhancing flexibility, efficiency, and customer service.
In conclusion, CIB's role in this transaction underscores its position as a trusted partner in the aviation sector. By leveraging the appetite from Japanese investors for the aviation sector, CIB continues to innovate and deliver solutions that cater to the evolving needs of its clients.
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