In an update for the fourth quarter and full year of 2021 Avolon, has revealed a busy end to the year.
“As we predicted at the start of the year, 2021 was shaped by the rapid distribution and take-up of vaccines, which resulted in the progressive easing of government travel restrictions and a strong rebound in global air travel,” said Dómhnal Slattery, CEO Avolon. “The scale of pent up demand for travel, and airlines moving to meet that demand, resulted in our fourth quarter being the most active period for leasing activity in our history. It is clear that the aviation industry will continue to face challenges in 2022 given new variants, but that market backdrop creates opportunities for us, and the fundamentals of the sector remain strong. As we look ahead, we are optimistic that both our platform and our people will continue to meet the challenges we face and seize the opportunities to thrive in the year ahead.”
In the fourth quarter of 2021, Avolon executed a total of 95 lease transactions comprising new aircraft leases, follow-on leases and lease extensions. The lessor delivered a total of 25 new aircraft to eight customers and transitioned six aircraft to follow-on lessees, and entered into Letters of Intent for the sale and leaseback of 40 aircraft. Some 12 aircraft were sold. Avolon also noted that during the quarter Fangda Group‘s investment into the HNA group of airlines for an ownership stake of c. 25% recapitalises and strengthens these airlines which account for 11% of Avolon’s portfolio.
For the full year, Avolon delivered a total of 49 new aircraft and transitioned 23 aircraft to a total of 30 customers. The lessor executed a total of 229 lease transactions comprising new aircraft leases, follow-on leases, lease extensions, and sale agreements for 16 aircraft.
Avolon’s owned and managed fleet reached 592 aircraft at year end, with total orders and commitments for 232 fuel-efficient, new technology aircraft. The lessor entered into sale and leaseback Letters of Intent commitments for 45 aircraft in 2021, and sold a total of 24 aircraft, five of which were managed.
Avolon succeeded in adding 14 new customers during 2021, for a total of 150 airline customers operating in 62 countries.
Also during the year, Avolon partnered with IAI to become the launch customer for the IAI A330-300 P2F cargo conversion programme, with a commitment for 30 conversion slots between 2025 and 2028.
In an innovative move in 2021 Avolon also inked a $2 billion order for up to 500 VX4 eVTOL zero emissions aircraft; and has subsequently placed 70% (or 350 units) of the VX4 eVTOL order, with GOL and Japan Airlines.
“2021 saw Avolon make its landmark investment in zero-emissions aircraft,” said Slattery. “Both our investment in, and our orderbook with, Vertical Aerospace – which successfully listed on the New York Stock Exchange in December – will prove to be a game-changer. eVTOLs are the first step towards a revolution in air travel and the strong demand for our VX4 orderbook from the world’s leading airlines shows that our airline partners share this view. We look forward to continuing to work with our customers to decarbonise air travel and work towards a net zero carbon economy.”
Avolon maintained strong credit metrics resulting in S&P, Moody’s and Fitch reaffirming the company’s Investment Grade credit rating with Stable outlook.
The leasing company continued to bolster its liquidity throughout the year, successfully raising $3.7 billion of new debt, at a historically low average cost of 2.5%. Avolon upsized its unsecured revolving facility by $1.1 billion to $4.3 billion, bringing total revolving debt capacity to $5.9 billion at year end; extended the maturity date of unsecured revolving facility from 2024 to 2026; and extended $2 billion of unsecured note maturities to 2027 and reduced the weighted average interest rate from 5.31% to 2.53%.