Avolon income returns to growth as aviation begins to recover

Aircraft lessor Avolon, which has its headquarters in Dublin, swung back into the black during the second quarter of this year as the company welcomed the "inflection point" in the recovery of the aviation sector.

The company recorded net income for the three months to June 30th of $64 million (€54 million), compared with a loss of $72 million for the same period in 2020.

However, its lease revenue was down 15 per cent, from $625 million to $610 million.

Rating agencies Moody’s and Fitch improved Avolon’s credit outlook to “stable” in the quarter.

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The company also generated $195 million of net cash from operating activities in the period.

It had total available liquidity of $6.6 billion at the end of the quarter, including $1.8 billion of unrestricted cash and $4.8 billion of undrawn debt facilities.

It ended the period with a secured debt-to-total-assets ratio of 22 per cent, and $17.3 billion of unencumbered assets.

In terms of operational matters, it owned and managed a fleet of 581 aircraft, with total orders and commitments for 256 fuel-efficient, new technology aircraft.

It executed a total of 48 lease transactions comprising new aircraft leases, follow-on leases and lease extensions.

It also sold three aircraft and entered into letters of intent for the sale of 12 aircraft.

It delivered a total of eight new aircraft to six customers and transitioned five aircraft to follow-on lessees.

Aviation recovery

Avolon chief executive Dómhnal Slattery said: “We have passed the inflection point and the recovery in global aviation is under way.

“However, as we have guided previously, the recovery will be uneven across different regions and markets with the pace of vaccine rollout being the springboard for the return to air travel.

“While we remain cautious, the scale of the increase in demand in the US over the last quarter, and the pace of vaccination programmes globally underscores our confidence in a continuing recovery through the remainder of this year.

“Reflecting the recovery, many of the key operational and financial metrics within our business continued to trend positively during the second quarter. We are seeing increased aircraft demand, improved traffic levels and fewer airlines in restructuring processes.

“As we work through the second half of the year and see increased activity among our airline customers, our expectation is that the sector will be strongly positioned to perform in 2022.”

Separately, Avolon announced that John Higgins, president and chief commercial officer; and Tom Ashe, chief operating officer, will retire from the business on October 15th. Both were co-founders of the business.

Andy Cronin assumes the title of president of Avolon in addition to his role as chief financial officer, while Paul Geaney has been appointed chief commercial officer.