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Abu Dhabi, UAEFriday 22 June 2018

Qatar Airways sells three 777 jets to leasing firm

The airline, which is facing a profit slump, will continue to operate the aircraft in an arrangement with BOC Aviation

Qatar Airways' chief executive Akbar Al Baker expects the company to post a loss in the fiscal year through next March. Ore Huiying/Bloomberg
Qatar Airways' chief executive Akbar Al Baker expects the company to post a loss in the fiscal year through next March. Ore Huiying/Bloomberg

Qatar Airways agreed to sell three Boeing 777 jets worth close to $500 million to leasing firm BOC Aviation, days after warning that it’s headed for an annual loss amid a Saudi-led boycott of its home nation.

As part of the transaction, the Gulf carrier will continue to operate the wide-body aircraft on so-called sale-and-leaseback terms, Hong Kong-based BOC Aviation said in a statement on Friday.

The 777-300ERs have an aggregate full-life current market value of $479 million, based on three independent appraisals, according to BOC, which said it can’t disclose the actual purchase price because of a confidentiality agreement.

The Asian firm added that the final amount will take into account the original sum paid by Qatar Airways to Boeing for the planes.

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Qatar’s chief executive Akbar Al Baker said on Tuesday that the company expects to post a loss in the fiscal year through next March after the boycott forced it to cancel

20 flights and divert others. All told, the carrier has lost 11 per cent of its network and 20 per cent of revenue, he said.

Qatar Air had net income of 1.97 billion riyals ($515 million) in its last fiscal year. The Doha-based group operates 36 Boeing 777-300ERs and has a further 12 on order, according to its most recent fact sheet.

BOC Aviation, the aircraft-leasing unit of Bank of China, owned 268 aircraft at the end of September, with another 34 under management and 197 on order, its website says.