Avolon Agrees on Transactions For Over 100 Aircraft in 2Q22

LONDON – Leasing giant Avolon has announced it agreed on transactions for over 100 aircraft in the second quarter of this year.

The lessor executed a total of 54 lease transactions in the quarter comprising new aircraft leases, follow-on leases, and lease extensions.

Avolon also entered into Letters of Intent for the sale and leaseback of 13 aircraft and the placement of 31 aircraft from Avolon’s order book.

They delivered one aircraft and transitioned nine aircraft onto follow-on lease agreements. The leasing giant also sold two aircraft during 2Q22 and entered into binding sale agreements for the sale of 30 owned aircraft.

Avolon ended the second quarter with a total of 146 airline customers operating in 62 countries, and currently owns and manages a fleet of 591 aircraft at quarter-end, with total orders and commitments for 260 fuel-efficient, new technology aircraft.

Positioning In The Wake of the Ukraine Crisis…

Avolon has currently been positioning itself from a $304m recorded loss caused mainly by stolen aircraft during the Ukraine Crisis by the Russian Government.

In its latest financial report published on May 3, 2022, Avolon has shown that despite the loss of these 10 planes, they have managed to generate a revenue of $320 million of net cash from already ongoing operating activities and $658 million from leases in the first quarter of 2022.

They have also noted that they have ended the quarter with the available liquidity reaching $5.4 billion.

“This impairment is partly offset by the net release of $43 million in other lease-associated balances resulting in a $261 million net impact to the income statement,” the lessor wrote in the statement.  

“As a result of this impairment, Avolon is reporting a net loss of $182 million for the quarter, and an adjusted net income, excluding the impact of Russia of $80 million for the period,” the statement continued.  

“Given the impact of sanctions, we are recognizing an impairment charge of $304 million in the first quarter in relation to our aircraft which were previously on lease in Russia.”

“While we continue to make every effort to recover these assets and are pleased to have repossessed four aircraft, we are recognizing the full impairment this quarter, putting the financial impact of Russian sanctions firmly behind us,” Slattery added. 

They are not the first leasing company who have been severely impacted by the huge aircraft theft from the Russians, nor are they the ones with the biggest loss.

That one goes to the other Irish leasing company AerCap, which has lost more than $800 million to the aircraft theft. 

The Russian government has also authorized a new law that permits airlines to re-register them as their own.

These jets are being used on the domestic market as the airlines (understandably) fear that “their” planes will be repossessed by the local authorities.

It surely is a shame that the very incompetent Russian leader Vladimir Putin has started the war on Ukraine, because, despite its faults, Russia is a very beautiful country with a very awesome population and a country with a rich aviation history as well.

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