Turkish Airlines has mandated the first financing structure to use the Sompo AXIS Aviation Finance Insurance (SAAFI), Aviation Non-Payment Insurance (ANPI) product. This transaction, sealed at a signing ceremony in Tokyo, Japan, marks a significant milestone in aviation financing insurance as it is the first time SAAFI has been mandated following its launch earlier this year.
Under the terms of the mandate, JP Lease will arrange equity and Sumitomo Mitsui Banking Corporation (SMBC) will provide the debt to Turkish Airlines for the delivery of one A350-900 and one A321-271NX aircraft (both expected in 2026). SMBC’s loan is supported 100% with an ANPI policy provided by the SAAFI insurers, Sompo and AXIS. This use of the SAAFI ANPI product in connection with a Japanese Operating Lease with Call Option (JOLCO) structure has allowed Turkish Airlines to significantly lower its all-in cost of financing. The policy was brokered by Willis, a WTW business (NASDAQ: WTW).
“We are pleased to be the launching customer of “SAAFI” with the support of our valued insurers Sompo and AXIS, Insurance broker Willis, our long-term business partners SMBC and JP Lease. At Turkish Airlines, we are committed to participating in the development of innovative solutions that support our growth and fleet renewal strategies. With financing models like SAAFI, we not only enhance our financial flexibility and resilience but also reinforce our leadership in the industry,” said Assoc. Prof. Murat Şeker, Turkish Airlines Chief Financial Officer and Member of the Board and the Executive Committee.
Tim Gaul, Financial and Political Risks Underwriter at Sompo said: “Sompo is honoured to have been mandated by our long-term partner Turkish Airlines to launch the SAAFI product on its inaugural financing of two Airbus aircraft. Sompo has extensive experience in the Aviation Non-Payment Insurance market having been involved in the financing of more than 120 aircraft globally over the past eight years. We believe our partnership with AXIS through SAAFI will be a welcome addition to our current suite of aviation financing products available to our customers, with Turkish Airlines the first of many who will benefit from our additional capacity.”
Richard Jelf, Senior Underwriter at AXIS said: “AXIS is proud to be bringing the SAAFI product to the aircraft finance market alongside Sompo and thrilled to have Turkish Airlines as our first customer. Building on our extensive experience in the aviation sector, SAAFI is an important addition to our product offerings in the Aircraft Non-Payment Insurance space. Through this initiative, AXIS can partner with new and existing customers, playing an important role in both their growth as well as that of the airline industry.”
Stuart Ashworth, Managing Director of Financial Solutions, Willis, a WTW business, added: “We are delighted to be able to assist Turkish Airlines and SMBC with this financing. This is also our first SAAFI mandate from Turkish Airlines; an innovative financing solution supporting an innovative, dynamic and forward-thinking airline.”
