Irish lessor Avolon has recorded a net loss of $162 million for Q2 following write-downs related to non-cash impairment charges and accelerated amortisation on airline restructurings.
The firm boosted its capital strength in Q2 with a 34% reduction in near-term capital commitments to the end of 2021, resulting in a year to date cumulative 52% reduction in capital commitments in the 2020-2023 timeframe, Avolon said it had a “strong liquidity position” at quarter end, with total liquidity in excess of US$5.1 billion.
Due to a number of Avolon’s clients entering into short-term rental deferral arrangements or were in arrears on their rental obligations. As a result, Avolon’s aggregate increase in trade receivables and deferred revenue asset implied a lease revenue collection rate during the first half of 2020 of 68%, with two thirds of the collection shortfall related to deferral arrangements.
Dómhnal Slattery, Avolon chief executive said, “ Based on our experience, we have taken decisive action since the start of the year, we have removed US$7.9 billion of near-term capital commitments and bought back US$639 million of our unsecured bonds at a discount to par, all while maintaining over US$5 billion of total liquidity.
These actions enhanced our capital strength and provide a strong foundation to support our customers in this critical period and to manage our business through the recovery.”
At the end of Q2 Avolon owned and managed fleet of 547 aircraft with total orders and commitments for 277 new technology aircraft and 145 airline customers in 62 countries.