Willis Lease Finance reported Q1/13 earnings of $1.6 million compared to $2.5 million in the like quarter a year ago. The company said the drop in earnings was primarily due to reduced gains on the sale of leased equipment, which decreased $1.9 million from a year ago.

Highlights from the news release included:

. Lease portfolio increased 4.6% to $1.02 billion, largely due to the purchase-leaseback transaction with Scandinavian Airlines that was completed late in the quarter. Willis said it had 193 commercial aircraft engines in its portfolio as of March 31, 2013.

. Total revenues fell slightly to $35.3 million from $35.7 million a year ago, with all revenue line items increasing in the period except for gains from sale of equipment which decreased $1.9 million.

. Total net finance costs increased 17% to $9.2 million, compared to $7.9 million in the year-ago quarter, reflecting higher debt levels and higher average financing costs.

“The highlight of our first quarter was the $118 million, 19 engine purchase-leaseback transaction completed in March with SAS Group’s subsidiary Scandinavian Airlines,” said Charles F. Willis, chairman and CEO. “This transaction was one of the largest and most complex engine sale and leaseback transactions ever done. We added 11 engines valued at $63 million to our lease portfolio, and a further 8 engines valued at $55 million were acquired by our joint venture, Willis Mitsui & Co Engine Support Limited. Since the engines were purchased in different tranches late in the quarter, the full quarterly impact on lease rent revenue won’t be realized until the second quarter.”

To read the Willis Lease Finance news release click here.