Willis Lease Finance Corporation (Willis Lease) has reported second quarter total revenues of $66.5 million and pre-tax loss of $1.9 million. For the three months ended June 30, 2021, aggregate lease rent and maintenance reserve revenues were $49.7 million and spare parts and equipment sales were $3.6 million. Willis Lease reported lower revenue in the second quarter when compared to the prior year period, primarily due to the pandemic’s impact on global travel and, consequently, worldwide fleet utilization.
“The industry continues to feel the effects of the global pandemic despite significant progress in the development and roll-out of COVID-19 vaccines,” said Charles F. Willis, Chairman and CEO. “While we are disappointed with our current financial results, we continue to position the Company for future performance by partnering with key customers on a variety of opportunities and building the Company’s long term capital base with the successful completion of our WEST VI asset backed securitization.”
“Unlike COVID’s initial impact on the aviation industry, which was severe and immediate, the recovery is happening much more slowly,” said Brian R. Hole, President. “But the recovery is underway and we are focused on what we can control: helping our customers rebuild with long term capital solutions; spare engine programs that allow airlines to defer maintenance spend; a wide variety of asset management services; and technical support for aircraft and engines.”
During the quarter, Willis Lease successfully completed a $336.7 million WEST VI notes offering secured by 29 aircraft engines and one airframe. This financing was the company’s seventh financing from its WEST platform, has an expected maturity of 8 years and a blended yield of 3.55%.
Willis Lease also entered into definitive agreements with Scandinavian Airlines for the purchase and long-term lease back of 20 V2500 aircraft engines, which is expected to fully close by September of 2021.
Total revenue was $66.5 million in the second quarter of 2021, an 11.4% decrease when compared to $75.0 million in the same quarter of 2020. Lease rent revenue was $32.4 million in the second quarter of 2021, compared to $38.5 million in the second quarter of 2020.
Maintenance reserve revenue was $17.3 million in the second quarter of 2021, a decrease of 42.4% compared to $30.0 million in the same quarter of 2020. The decline in maintenance revenue was primarily influenced by lower long-term maintenance revenue, which is associated with engines returning from long-term lease. Long-term maintenance reserve revenue was $14.8 million in the second quarter of 2021, compared to $27.2 million in the comparable prior period.
Willis Lease recognized a $6.3 million asset transition fee in the second quarter of 2021 as a result of the close out of an engine transition program. Other revenue increased to $6.9 million, or 58.1%, in the second quarter of 2021, compared to $4.4 million in the second quarter of 2020, primarily reflecting interest income from our notes receivable and other service related fees.
Losses before income taxes were $1.9 million in the second quarter of 2021, compared to income before income taxes of $9.7 million in the second quarter of 2020.
Willis Lease’s aggregate lease assets, inclusive of equipment held for operating lease and notes receivable, at June 30, 2021 and 2020 was $2,085.6 million and $1,824.1 million, respectively, a 14.3% year-over-year increase.
As of June 30, 2021, Willis Lease’s $1.890 billion equipment held for operating lease portfolio and $195.6 million notes receivable represented 300 engines, eight aircraft, one marine vessel and other leased parts and equipment. As of December 31, 2020, the company’s $1.887 billion equipment held for operating lease portfolio and $158.7 million notes receivable represented 291 engines, eight aircraft, one marine vessel and other leased parts and equipment.