Avation PLC has released its latest trading update for the first half of 2019.
Following the liquidation of Thomas Cook in September, Avation issued default notices and successfully repossessed two Airbus A321- 200 aircraft. The aircraft were then submitted for calendar airframe maintenance checks and marketed to airlines as available for lease.
Subsequently, Avation has signed a letter of intent to lease both aircraft to an existing customer on long-term leases expected to commence in December 2019. As a result of the re-positioning of the aircraft and taking into account the security deposits forfeited by Thomas Cook the impact on lease rental revenue for the period ended 31 December 2019 has been minimised. The leases remain subject to the completion of definitive documentation and the satisfaction of customary lease conditions precedent by the airline. The two aircraft are also available for sale.
Since July, Avation has delivered two ATR 72-600 aircraft to customers and expects to take delivery of three additional ATR 72-600 aircraft from its order book before 31 December 2019. These aircraft will subsequently be leased to Braathens Regional Airways. A fourth aircraft for Braathens is expected to be delivered in the first quarter of 2020.
Following the delivery of the four aircraft to Braathens, the company will have five remaining orders for ATR 72-600 aircraft for delivery between October 2020 and April 2022 and 25 purchase rights for additional ATR 72 aircraft for delivery prior to December 2025.
At the current date, Avation’s fleet totals 48 aircraft. Avation’s customers include 17 airlines in 14 countries. The average age of the fleet is 3.8 years and the average remaining lease term is 7.1 years.
Investors are advised that finance leases for two Fokker F100 aircraft will complete in December 2019 and ownership of the aircraft will be transferred to the current lessee airline. The aircraft will be 26 and 28 years old respectively at the time of the conclusion of the leases. Avation further advises that the finance leases for the remaining three Fokker F100 aircraft in the fleet will end during calendar year 2020.
Avation will continue to focus on growing the fleet and adding new airline customers for the remainder of the financial year. The company is currently assessing jet aircraft for acquisition, in addition to scheduled deliveries of new ATR 72-600 aircraft from our order book.
Executive chairman Jeff Chatfield said: “Avation’s team can be commended for the rapid repossession, maintenance, marketing and re-positioning of the two ex-Thomas Cook aircraft. Remarketing ability is key to any aircraft leasing company.
"This episode has demonstrated the importance of Avation’s focus on young, popular aircraft as evidenced by the number of airlines who expressed interest in leasing these two Airbus A321-200 aircraft. Avation has continued to deliver organic growth and expects to report record revenue for the first half-year financial period.
Avation is pleased to reward the owners of the company with the first interim dividend for the financial period commencing 1 July 2019.”
The group estimates that its lease rental revenue for the half-year ending 31 December 2019 will increase by 12% to approximately $65.2 million, up from $58.2 million in the same period last year.