Global aircraft lessor Avolon has issued an update for the fourth quarter and for the full year (FY) 2023.
Underpinned by strong demand by airlines for aircraft and capital, Avolon saw out a year of strong leasing activity, and moves into the new year on a firm footing.
2023 Full Year Highlights
Avolon’s success story for the full year 2023 is marked by a series of noteworthy achievements:
Avolon made a bold move by ordering 200 new aircraft, including 100 A321neo, 80 737MAX, and 20 A330neo. This strategic expansion solidifies their position in the market and sets the stage for future growth.
The company entered into letters of intent for the sale and leaseback of 51 new aircraft, a testament to Avolon’s proficiency in navigating the complex aviation finance landscape.
Executing 147 lease transactions, comprising new aircraft leases, follow-on leases, and lease extensions, Avolon showcased agility and flexibility in meeting the diverse needs of its clientele.
Fleet & Asset Management
Delivering 43 new aircraft and transitioning 30 aircraft to 22 customers, Avolon not only expanded its fleet but also strengthened relationships with its customers.
The company sold 31 aircraft in 2023 and concluded the year with 25 aircraft agreed for sale, demonstrating a strategic approach to asset management.
Impressive Fleet Growth
Avolon closed the year with a remarkable fleet of 1,035 aircraft, marking a 24% increase year on year. This scale is a testament to their robust business model and market dominance.
Raising US$4.9 billion of new debt across both public and private markets, Avolon showcased financial acumen in supporting its ambitious growth plans.
Strengthened Debt Facilities
The unsecured revolving facility was upsized to US$4.8 billion, bringing the total revolving debt capacity to US$6.1 billion at the year end. This move provides Avolon with a strong financial foundation for future endeavors.
Avolon’s commitment to sustainability is evident in its second annual sustainability report. The company affirmed its ‘Low Risk’ rating by Sustainalytics and initiated a feasibility study into the production of Sustainable Aviation Fuel in Ireland in collaboration with Boeing and ORIX Aviation.
Q4 Highlights: Navigating Turbulence
The fourth quarter of 2023 brought its own set of challenges, but Avolon navigated them with finesse:
Avolon placed orders for 100 A321neos and 40 737 MAX aircraft, reinforcing its commitment to staying at the forefront of technological advancements in aviation.
Entering into letters of intent for the sale and leaseback of 14 aircraft, Avolon continued its success in the intricate world of aviation finance.
Executing 43 lease transactions in Q4, Avolon showcased agility and adaptability in meeting the evolving needs of its clients.
Delivering 22 new aircraft and transitioning 4 aircraft to 11 customers, Avolon continued to enhance its fleet, ensuring a balance between growth and customer satisfaction.
Avolon closed a private offering of US$400 million in senior unsecured notes due 2028, demonstrating financial dexterity in tapping into diverse funding sources.
The company repriced a US$2.3 billion Term Loan B, extending $650 million of the facility from 2027 to 2028. This strategic move reflects Avolon’s proactive approach to optimizing its financial structure.
The solid year’s performance places the global lessor on a firm footing for the coming year. Andy Cronin, CEO Avolon, commented:
“Strengthening market conditions allowed us to place our orderbook and used aircraft at accretive lease rates while underwriting US$4bn of new volume through the sale and leaseback market.”
“Our balance sheet scale allowed us to order a further 200 new technology aircraft which strengthens our delivery pipeline and growth into the next decade.”
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