Avolon has reported a strong third quarter of the year with the company noting promising financial and operating figures for the three-month period between July and September.
The lessor has recorded a net income of $120 million during the third financial quarter of the year. This is an increase of 24% when compared to the third quarter of the year prior. Lease revenues were also up in the quarter to $677 million, with Avolon recording a 15% increase with the comparable quarter last year.
Avolon generated $536 million of cash from operating activities, with the last 12 months of operating cash for the company now totalling $1.8 billion.
In addition, the company increased its unsecured revolving debt capacity to $5.7 billion, raising its total available liquidity to $9.1 billion as of the quarter’s end. Avolon's net debt-to-equity is 2.3x, unsecured debt-to-total-debt ratio of 64% and sources-to-uses ratio of 1.7x.
“Our positive earnings momentum will be further strengthened by the Castlelake acquisition, adding a complementary portfolio of assets that will drive our earnings profile. Our aircraft sales activity and operating cash generation support our strong balance sheet and liquidity position, driving further positive credit ratings momentum,” said Andy Cronin, Avolon CEO
During the quarter the company sold 11 aircraft, and has 59 aircraft agreed for sale. Avolon delivered a total of nine new aircraft this quarter along with the transition of five additional aircraft, expanding its services to a total of 11 customers. The company also entered into letters of intent for sale-and-leaseback agreements on nine aircraft. The lessor’s customer network now spans 141 airlines across 62 countries.
Notably during this financial quarter, Avolon acquired Castlelake Aviation and its portfolio of 105 aircraft, two engines and 13 aircraft commitments. The portfolio has an average fleet age of 4.7 years, with 70% of the portfolio invested in new-technology aircraft. The acquisition will provide Avolon with up to $3.3 billion in transferable debt upon closing, with a net purchase price of approximately $1.2 billion funded from existing liquidity sources.
The company’s pro forma net debt-to-equity ratio is estimated at 2.5 times as of the quarter’s end. The transaction, which remains subject to customary closing conditions, is expected to complete in Q1 2025.