WestJet has begun retiring its remaining Boeing 737-700s after FTAI Aviation acquired 27 of the aircraft operated by the Canadian airline, a deal FTAI describes as one of the largest aircraft transactions in its history.

The transaction, announced on September 28, 2026, splits into two parts. FTAI's second special purpose vehicle — launched in 2026 under its Strategic Capital business — acquired 17 Boeing 737-700s on lease to WestJet under a sale-leaseback agreement. FTAI then separately acquired 10 off-lease 737-700s, which will feed the company's Aerospace Products business rather than return to airline service.

The SPV sits inside FTAI's Strategic Capital unit, which the company formed to acquire on-lease, mid-life 737NG and A320ceo-family aircraft. The structure lets FTAI serve two sides of the mid-life narrowbody market at once: capital relief for operators still flying the type, and parts and engines for aircraft exiting fleets.

For WestJet, the deal closes out a fleet chapter. "This 27-aircraft transaction is a strategic milestone that officially marks the start of our retirement of our 737-700 fleet," said Mike Scott, WestJet Group Executive Vice-President and CFO. "We're pleased to partner with FTAI Aviation Ltd. to make this happen, and we look forward to building on this relationship for future opportunities."

The retirement timeline had already been moving. In June 2026, WestJet CEO Alexis von Hoensbroech told FlightGlobal the airline was accelerating the retirement of its oldest 737-700s in response to high fuel prices — an economic calculation that makes the smallest member of the 737NG family increasingly expensive to operate relative to newer narrowbodies.

The 10 off-lease airframes carry a specific strategic value for FTAI. According to the company, they will expand its supply of CFM56-7B engines and modules available to its customers. The -7B powers the 737NG family, and FTAI has built its Aerospace Products business around maintenance, repair and exchange of that engine platform — an area where used serviceable material from retired airframes supports engine shop visits across the global 737NG fleet still in operation.

David Moreno, President at FTAI, framed the deal as a demonstration of how the company's two business lines can combine on a single transaction. "It demonstrates how our Strategic Capital and Aerospace Products businesses work together to offer airlines comprehensive fleet solutions, from sale-leaseback capital for in-service aircraft to a flexible exit for aircraft transitioning out of the fleet," Moreno said.

The structure matters for other mid-life fleet operators. WestJet secures sale-leaseback proceeds on 17 aircraft it intends to keep flying for now, while shedding 10 airframes it no longer needs — avoiding the cost and time of individual end-of-lease dispositions. FTAI, in turn, books leasing income on the on-lease aircraft and harvests engine material from the off-lease ones.

The 17 aircraft acquired through the SPV remain on lease to WestJet, meaning the retirement itself will play out over the remaining lease terms rather than at a single stroke. FTAI's Strategic Capital platform, built specifically for mid-life 737NGs and A320ceos, suggests further transactions of this type as more carriers cycle out their oldest narrowbodies and seek counterparties able to handle both the capital and the teardown sides of a fleet exit.