LONDON – Leasing giant Avolon has released its third-quarter information, having executed 54 lease transactions in a three-month period.

Avolon has had a busy three months, with the following highlights outlined by the company:

• Executed a total of 54 lease transactions in the quarter comprising new aircraft leases, follow-on leases, and lease extensions;
• Agreed on a landmark transaction with Malaysia Airlines for the financing of 20 A330-900neo aircraft valued at over $2 billion;
• Sold 13 aircraft during the quarter;
• Entered into Letters of Intent for the sale of 7 owned aircraft;
• Delivered a total of 4 aircraft to 3 customers and transitioned 7 aircraft to follow-on lessees;
• Ended the first quarter with a total of 149 airline customers operating in 63 countries;
• Owned and managed a fleet of 568 aircraft at quarter end, with total orders and commitments for 265 fuel-efficient, new technology aircraft;
• Upsized unsecured revolving credit facility by $0.2 billion, bringing the total facility size to $4.6 billion and executed a $0.7 billion term financing facility maturing 2029.

The 54 transactions are lower than the 2Q22 reports, where 100 aircraft were involved in that period.

Recovering from Russia…

Moreover, the company has done well in resolving its financial downturn caused by the $304m loss in leased jets that are stuck in Russia.

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. 

Overall…

It remains clear that Avolon is on a steady cruise for success now that the worst of the Ukraine Crisis is over aviation-wise.

With the company continuing to sign new transactions, it is a reflection of the strong demand they are currently experiencing and will continue to experience for many years to come.

Either way, it’s going to be interesting to see how Avolon chooses to deal with the upcoming global financial downturn and how it will continue such transactions too.