Avolon, the international aircraft leasing company, has announced a “strong performance in net income” for the second quarter (Q2) of 2023.
The lessor posted a nine times net income increase year-on-year to US$76 million, with a 22% increase in operating cashflow to US$371 million. Lease revenue rose by 14% to US$613 million.
During the quarter, Avolon raised US$3.4 billion of debt capital in the quarter, including: a private offering of US$750 million of senior unsecured notes maturing in 2028; a US$1.7 billion Term Loan B refinancing with new loan maturing in 2028; and signed a Letter of intent for a US$950 million term financing facility maturing in 2030.
Avolon’s total available liquidity of US$7.3 billion comprises US$401 million of unrestricted cash, US$6.2 billion of undrawn debt facilities and US$616 million of contracted sales;
The lessor’s net debt to equity is 2.2 times, a secured debt to total assets ratio of 22% and US$15bn of unencumbered assets.
Also, during the reporting period, Fitch affirmed Avolon’s BBB- rating and improved the rating outlook from Stable to Positive.
Avolon executed 31 lease transactions comprising new aircraft leases, follow-on leases and lease extensions during the second quarter, and entered into letters of intent for the sale and leaseback of nine aircraft.
The lessor also confirmed order for 40 Boeing 737 MAX aircraft and agreed to order 20 Airbus A330neo aircraft. Five new aircraft were delivered and 13 aircraft were transitioned to new customers. Avolon sold three aircraft and executed sale agreements for a further 17 aircraft, and entered into letters of intent to place 23 aircraft from our orderbook during the quarter.
With the addition of two new customers, Avolon has a total of 149 airline customers operating in 65 countries; and ended the quarter with an owned, managed and committed fleet of 875 aircraft, including orders and commitments for 297 fuel-efficient, new technology aircraft.
“This was an excellent quarter for Avolon which demonstrates the positive net income and lease revenue trajectory of the business,” said Andy Cronin, Avolon CEO. “Our increased trading and sale and leaseback activity, along with placement from our order book at attractive lease rates, will drive our financial performance in the future setting the foundation for long-term profitability.”
He added: “Our commitment with Boeing for 40 new 737 MAX aircraft and Airbus for 20 new A330neo aircraft reflects our confidence in the future outlook of the industry and our customers’ demand for additional aircraft to meet future growth plans in an undersupplied market.”