Southwest Airlines sells and leasebacks 36 aircraft to raise cash

Southwest Airlines and Babcock & Brown Aircraft Management (BBAM) announced Tuesday the sale and leaseback of 36 Boeing 737-800 aircraft. Incline Aviation III, the third in BBAM's flagship aviation investment fund series, will own and lease the aircraft to Southwest Airlines.

Steve Zissis, president and CEO of BBAM said the transaction underscores the company’s commitment to delivering tailored fleet financing solutions to airlines.

“We are excited to partner with Southwest Airlines, one of the world's most admired and awarded airlines, on this landmark sale-leaseback transaction,” Zissis said in a company press release. “We look forward to a long and successful relationship with Southwest Airlines."

Tammy Romo, executive vice president and CFO of Southwest Airlines said the sale and leaseback is part of the company’s transformational plan announced last year.

“This transaction is part of our 'Southwest. Even Better.' transformational plan introduced in September at Investor Day,” Romo said. “By opportunistically monetizing surplus value from a portion of our existing all-Boeing 737 fleet, Southwest is generating significant cash to drive fleet modernization and offset capital expenditures in support of our capital allocation strategy.  We are very pleased to partner with BBAM, one of the world's leading aircraft lessors, on this transaction."

Southwest Airlines offers service at 117 airports across 11 countries. The airline launched in 1971.