Aircastle has reported total revenues of $197.5 million for the three months ended February 28, 2021, which amounts to a net loss of $(95.8) million and an adjusted EBITDA of $179.9 million. The aircraft booked a gain of $9.4million following the sale of flight equipment.
For the full fiscal year 2020, Aircastle reported a net loss of $(333.2) million.
During this fourth fiscal quarter, Aircastle issued $750 million of seven-year senior, unsecured bonds at a record low coupon of 2.85%, and also retired $500 million of 5.125% coupon bonds.
Aircastle’s Investment Grade credit ratings recently affirmed by Fitch at BBB, S&P at BBB- and Moody's at Baa3.
During the 12 month period, Aircastle acquired five narrow-body aircraft for $154 million, and sold 12 aircraft for proceeds of $180 million and a total gain on sale of $33.5 million; the average age of aircraft sold was approximately 13.4 years.
Aircastle delivered its first of twenty-five Embraer E2 aircraft to KLM Cityhopper on April 19, 2021; to date, eighteen E-Jets have been placed; fifteen 195 E2s placed with KLM.
For the three months ended February 28, 2021, collections represented approximately 80% of lease rental and direct financing and sales-type lease revenue.
As of April 1, 2021, Aircastle’s total liquidity of $2.3 billion includes $1.25 billion of undrawn credit facilities, $609 million of unrestricted cash, $123 million of contracted asset sales, and $340 million of projected operating cash flows through April 1, 2022.
The aircraft lessor reports that 219 of its aircraft are unencumbered with a net book value of $5.4 billion, and states that it has $1.1 billion of total adjusted contractual commitments through April 1, 2022.
Mike Inglese, Aircastle's Chief Executive Officer, commented, "While 2020 was a challenging year for the aviation industry, we have strong conviction that the long-term fundamentals for air travel are intact. Although there are still challenges ahead in the near term, as the vaccine rollout continues, we believe global travel will begin to normalize. Aircastle's fleet of modern, fuel-efficient aircraft remains desirable to the well managed airlines who will survive the COVID crisis, and our predominantly single-aisle aircraft investments will benefit from a recovery that will be driven by domestic, leisure market demand."
Inglese continued, "Airlines around the world have added significant financial leverage throughout the crisis, and this will impact their access to capital and make leasing increasingly important to all airlines as a fundamental source of financing. As the recovery unfolds, our experienced management team working with our long-term oriented shareholders, Marubeni Corporation and Mizuho Leasing, will allow Aircastle to resume profitable and disciplined long-term growth."
As of February 28, 2021, Aircastle owned 252 aircraft and other flight equipment having a net book value of $6.7 billion. The company also manages nine aircraft with a net book value of $312 million dollars on behalf of its joint venture with Mizuho Leasing.
Aircastle is still dealing with deferral requests. As of April 15, 2021, the company had executed or approved deferral arrangements with 26 airlines representing 35% of its customer base. The amount currently deferred is $108 million, which represented approximately 17% of its reported lease rental and direct financing and sales-type lease revenues for the twelve months ended February 28, 2021.
Seven of its airline customers were subject to judicial insolvency proceedings or similar protection. Aircastle leases 23 aircraft to these customers, which comprise 14% of its net book value of flight equipment and 12% of its reported lease rental and direct financing and sales-type lease revenues for the twelve months ended February 28, 2021. “While we anticipate that there may be additional airline bankruptcies and liquidations in future periods, we remain confident that our core customers who are the major US and global carriers, as well as the largest low-cost carriers, have the means to survive the COVID-19 crisis,” states the lessor.
In addition to $519 million of maintenance reserves, $81 million of security deposits and $58 million of lease rents that have been paid in advance, Aircastle holds an additional $151 million in letters of credit from its lessees. The lessor states that these combined reserves total $809 million and provide “significant protection against potential future airline failures and the unscheduled return of additional aircraft”.
During the fourth quarter, Aircastle recorded non-cash impairment charges totalling $126 million primarily related to four narrow-body and four A330 wide-body aircraft. Partially offsetting these fourth quarter charges were total combined maintenance revenues and gains from the sale of flight equipment totalling $61 million for the quarter. For the full year, non-cash impairment charges related to 26 aircraft and other flight equipment totalled $426 million. The impairment charges were partially offset by combined maintenance revenue and gains from the sale of flight equipment which totalled $206 million for the year.