Responding to reports in the media, Avation, the commercial passenger aircraft leasing company based in Singapore, issued an advisory clarifying that all of its “leases remain in force and ongoing, save as otherwise announced”.
During the period of the pandemic, Avation confirmed that it entered into a number of agreements with airlines to provide them with financial support. As the pandemic has progressed, some of these earlier lease amendment agreements with airlines were superseded and became obsolete. “Where appropriate, the Company has taken steps to formally terminate these earlier lease amendment agreements in the context of negotiations with airlines for further COVID-19 financial support.
Where appropriate, the Company does use formal legal proceedings to protect its legal position. However, this has always been in the context of ongoing discussions with airlines in relation to reaching agreement on the settlement of COVID-19 related rental arrears. The Company is satisfied that it has, at this stage, received sufficient commitments from its airline customers to suspend further actions in respect to any material claims in active legal proceedings.”
Executive Chairman Jeff Chatfield said “In the dialogue with our airline customers we have needed to strike a balance between supporting them and protecting the Company’s revenues, which task has not been easy; we believe we have managed this balance appropriately. The Company has made substantial progress in leasing or selling the aircraft returned by Virgin Australia. Philippine Airlines is retaining our Boeing 777-300ER aircraft and is paying rents under the airline’s plan of reorganization. With the remaining agreements in principle reached with our airline customers, the material COVID-19 challenges facing the Company have been navigated, enabling the Company to begin looking to recovery and growth.”