Avolon has reported net income for the three months to 30 September of $5.9 million, on lease revenue of $518 million for the quarter, which was essentially flat compared to Q3 2020. Avolon confirmed that it had generated $237m of net cash from operating activities in the quarter.
The aircraft lessor had total available liquidity of $6.6bn at end of Q3, including $706m of unrestricted cash and $5.9bn of undrawn debt facilities. During the reporting period, Avolon upsized unsecured revolving facility by $1.1bn to $4.3bn; extended the maturity date from 2024 to 2026; and extended $2.0bn of unsecured note maturities to 2027 and reduced the weighted average coupon from 5.31% to 2.53%; repaid approximately $650m of secured debt during the quarter with a weighted average interest cost of 3.93%; and repriced $672m Term Loan B, reducing cost by 50bps.
The company ended the quarter with a secured debt to total assets ratio of 20%, and $17bn of unencumbered assets.
Highlighted quarter achievement include Avolon’s partnership with IAI as launch customer for its A330-300 P2F cargo conversion programme. Avolon has committed to 30 conversion slots between 2025 and 2028. “The agreement with IAI, global leaders in freighter conversion, signals our intent to become a key player in the increasingly vibrant air cargo market,” said Avolon CEO Dómhnal Slattery.
Avolon-e also announced that GOL and Grupo Comporte have committed to purchase or lease up to 250 eVTOL aircraft and post quarter end Japan Airlines has committed to purchase or lease up to 100.
Avolon has an owned and managed fleet of 585 aircraft, with total orders and commitments for 245 new technology aircraft. The average owned fleet age is 5.7 years with an average remaining lease term of 6.7 years. During the third quarter, Avolon executed a total of 54 lease transactions comprising new aircraft leases, follow-on leases and lease extensions, and sold two aircraft and executed sales agreements for a further 10 aircraft. The lessor delivered a total of eight new aircraft to six customers and transitioned nine aircraft to follow-on lessees.
“Over the past three months we have met with airline CEOs on every continent,” said Slattery. “The clear message is that our customers are positioning themselves for a robust recovery. Avolon is well placed to support our airline partners in this recovery with an attractive skyline of available aircraft in the 2023-2025 timeframe.
He further confirmed that following the Q2 announcement that Avolon would be a launch customer for Vertical’s VA-X4 zero emissions aircraft, the company had now placed over half of its initial order of 500 VA-X4 aircraft, confirming agreements with Brazil’s GOL and Japan Airlines for 250 and 100 aircraft, respectively.