Following its AGM in Singapore, leasing company Avation has confirmed that it is concluding the transition of an Airbus A320 from Air France to a new client and that it expects to take re-delivery of a Boeing 737-800 from Garuda Indonesia in the coming weeks. This aircraft may be sold or leased “depending on market demand”. Avation is also remarketing two ATR72-600 aircraft that are at the end of lease from Loganair. Avation advises that the next aircraft scheduled to come off lease is not until March 2023.
Avation further confirmed that 14 of 17 of its airline customers are now being charged normal monthly rental levels and noted that the collection of debts has been “challenging during the pandemic due to the severe disruption to airline cashflows and Avation has had to monitor and work closely with airlines to ensure operational cashflow is maintained”.
The leasing company also disclosed that it expects Garuda Indonesia to enter some form of restructuring or insolvency in the near future and that in anticipation, Avation has entered into a termination agreement with the airline with regard to the lease for one Boeing 737-800 and notes that the aircraft is expected to be returned in the coming weeks. The aircraft is unencumbered and will be re-marketed for sale or lease following its return, confirmed Avation.
Avation adds that it is considering applying cash to de-lever the balance sheet with a specific focus on the outstanding Avation Capital S.A. Senior Notes due October 2026. The lessor finishes that it is “optimistic about the long-term opportunity for air travel particularly the turbo-prop and narrow-body aircraft sectors” and that it intends to position the company for a return to growth through “opportunistic purchases and delivery of its orderbook in a post-pandemic environment”.