2022 ‘Fearless Forecasts’ Avolon Publishes 2022 Outlook Paper - ‘Rise Above’

Avolon, the international aircraft leasing company, issued its annual outlook paper for 2022 titled ‘Rise Above’. Co-authored by Jim Morrison, Head of Portfolio Management, and Rosemarie O’Leary, Head of Counterparty Risk, the paper reviews the key trends in the aviation industry for airlines, manufacturers, and lessors, identifying themes that will shape the year ahead and setting out Avolon’s ‘Fearless Forecasts’ for 2022. 

2022 ‘Fearless Forecasts’ predicts continued aviation recovery, as the lessor share of the large commercial aircraft fleet surpasses 50%

 2022’s seven forecasts are set out below and the full paper is available at: https://www.avolon.aero/newsroom-and-thoughts

Jim Morrison, Head of Portfolio Management commented: “Aviation’s recovery unfolded in 2021 as anticipated, with vaccines offering a springboard for the easing of government restrictions and re-openings of economies around the world. This allowed many of us to pass an important milestone, boarding our first plane in a post-pandemic world. It is clear from the re-opening that the importance of air travel to society, and the global economy, remains undiminished.

Aviation’s resilience was demonstrated again in 2021, with airline operating losses halving to $54 billion as airlines positioned themselves to capitalize on the pent-up demand evident in the market. Looking ahead, the strong economic growth forecast for 2022 will drive a further recovery in demand for air travel. While we are confident in recovery, it will be a gradual and uneven recovery that will vary region-by-region. In 2022, a strong recovery in international air traffic will follow the domestic air travel rebound of 2021, bouncing back to 70% of 2019-levels by year-end.”

Rosemarie O’Leary, Head of Counterparty Risk commented: “Aircraft lessors will continue to be an integral part of the recovery, supporting airlines as they seek to restore their balance sheets, re-fleet, and grow. As airlines begin deleveraging and transitioning to asset-light business models, the lessor share of the commercial fleet will grow as they fund new deliveries.

Beyond the recovery, environmental considerations will remain central to the aviation agenda for the period ahead. The aviation sector continues to focus on reducing emissions and committing to decarbonization. Solutions to support further decarbonization, such as sustainable aviation fuels, are progressing but policies must be structured to ensure that adoption is economically viable. Emission-free flight is also on the horizon. Aerospace innovation is accelerating with the development of electric-powered aircraft which provide a glimpse into the sustainable future of flight.”

2022 ‘Fearless Forecasts’

Avolon Continues Expansion of its Fleet and Customer Base In 2021

Avolon, the international aircraft leasing company, issues an update for the fourth quarter and 2021 full year.

Reviewing 2021, Dómhnal Slattery, CEO Avolon, commented: “As we predicted at the start of the year, 2021 was shaped by the rapid distribution and take-up of vaccines, which resulted in the progressive easing of government travel restrictions and a strong rebound in global air travel. The scale of pent up demand for travel, and airlines moving to meet that demand, resulting in our fourth quarter being the most active period for leasing activity in our history. It is clear that the aviation industry will continue to face challenges in 2022 given new variants, but that market backdrop creates opportunities for us, and the fundamentals of the sector remain strong. As we look ahead, we are optimistic that both our platform and our people will continue to meet the challenges we face and seize the opportunities to thrive in the year ahead.

2021 saw Avolon make its landmark investment in zero-emissions aircraft. Both our investment in, and our order book with, Vertical Aerospace – which was successfully listed on the New York Stock Exchange in December – will prove to be a game-changer. eVTOLs are the first step towards a revolution in air travel and the strong demand for our VX4 order book from the world’s leading airlines shows that our airline partners share this view. We look forward to continuing to work with our customers to decarbonise air travel and work towards a net-zero carbon economy.”

Last Quarter Highlights

- Executed a total of 95 lease transactions in the quarter comprising of new aircraft leases, follow-on leases and lease extensions;

- Delivered a total of 25 new aircraft to 8 customers and transitioned 6 aircraft to follow-on lessees;

- Entered into Letters of Intent for the sale and leaseback of 40 aircraft;

- Sold 12 aircraft; and

- Fangda Group‘s investment into the HNA group of airlines for an ownership stake of c. 25% recapitalises and strenghtens these airlines which account for 11% of our portfolio.

Avolon, the international aircraft leasing company delivered, transitioned and sold a total of 91 aircraft and executed 229 lease transactions during 2021.

Avolon, the international aircraft leasing company delivered, transitioned and sold a total of 91 aircraft and executed 229 lease transactions during 2021. 

Reviewing 2021, Dómhnal Slattery, CEO Avolon, commented:“As we predicted at the start of the year, 2021 was shaped by the rapid distribution and take-up of vaccines, which resulted in the progressive easing of government travel restrictions and a strong rebound in global air travel. The scale of pent up demand for travel, and airlines moving to meet that demand, resulted in our fourth quarter being the most active period for leasing activity in our history. It is clear that the aviation industry will continue to face challenges in 2022 given new variants, but that market backdrop creates opportunities for us, and the fundamentals of the sector remain strong. As we look ahead, we are optimistic that both our platform and our people will continue to meet the challenges we face and seize the opportunities to thrive in the year ahead.

2021 saw Avolon make its landmark investment in zero-emissions aircraft. Both our investment in, and our orderbook with, Vertical Aerospace – which successfully listed on the New York Stock Exchange in December – will prove to be a game-changer. eVTOLs are the first step towards a revolution in air travel and the strong demand for our VX4 orderbook from the world’s leading airlines shows that our airline partners share this view. We look forward to continuing to work with our customers to decarbonise air travel and work towards a net zero carbon economy.”

FLEET HIGHLIGHTS 2021

 

-       Delivered a total of 49 new aircraft and transitioned 23 aircraft to a total of 30 customers;

 

-       Executed a total of 229 lease transactions comprising new aircraft leases, follow-on leases, lease extensions, and sale agreements for 16 aircraft;

 

-       Owned and managed fleet of 592 aircraft at year end, with total orders and commitments for 232 fuel-efficient, new technology aircraft;

 

-       Entered into sale and leaseback Letters of Intent commitments for 45 aircraft;

 

-       Sold 24 aircraft in 2021, 5 of which were managed;

 

-       Added 14 new customers during 2021, for a total of 150 airline customers operating in 62 countries;

 

-       Partnered with IAI to become the launch customer for the IAI A330-300 P2F cargo conversion programme, with a commitment for 30 conversion slots between 2025 and 2028;

 

-       Ground-breaking $2 billion order for up to 500 VX4 eVTOL zero emissions aircraft; and

 

-       Placed 70% (or 350 units) of this VX4 eVTOL order, with GOL and Japan Airlines.

FY FINANCIAL HIGHLIGHTS

 

-       Maintained strong credit metrics resulting in S&P, Moody’s and Fitch reaffirming Avolon’s Investment Grade credit rating with Stable outlook;

 

-       Upsized unsecured revolving facility by $1.1 billion to $4.3 billion, bringing total revolving debt capacity to $5.9 billion at year end;

 

-       Extended the maturity date of unsecured revolving facility from 2024 to 2026; 

 

-       Successfully raised $3.7 billion of new debt, at a historcally low average cost of 2.5%; and

 

-       Extended $2 billion of unsecured note maturities to 2027 and reduced the weighted average interest rate from 5.31% to 2.53%.

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Ciara Ruane joins Avolon as Chief People Officer

Avolon, the international aircraft leasing company, announces that Ciara Ruane has joined Avolon to serve in a newly established role: Chief People Officer (CPO). As CPO, Ciara will be responsible for leading Avolon’s people strategy, employee experience, rewards, retention, recruitment, diversity & inclusion, and leadership development and learning. In her role as CPO, Ciara will be a core member of Avolon’s executive leadership team, joining its Executive Committee (‘ExCo’) effective immediately. 

Ciara has over 20 years’ Human Resources (HR) experience working in strategic HR and effectiveness. Most recently, Ciara served as Group Director of People and Culture at Primark. Aside from the management of the day-to-day employment lifecycle, she was also responsible for the creation of its people strategy and the development of Primark’s People & Culture leadership team globally, ensuring best practice HR processes were embedded across Primark’s 15 markets for the benefit of its 80,000 employees.

Avolon the international aircraft leasing company, announces results for the third quarter of 2021.

 Avolon, the international aircraft leasing company, announces results for the third quarter (‘Q3’) of 2021. Avolon’s cost of capital reduced to 3.6% following $4 billion of capital markets activity in Q3

2021 THIRD QUARTER RESULTS

-        Net Income for the three months to 30 September was $5.9m;

-        Delivered $518m of lease revenue and generated $237m of net cash from operating activities in the quarter;

 

Upsized unsecured revolving facility by $1.1bn to $4.3bn, and extended the maturity date from 2024 to 2026;

-        Total available liquidity of $6.6bn at end of Q3, including $706m of unrestricted cash and $5.9bn of undrawn debt facilities;

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%;

 

Repriced $672m Term Loan B, reducing cost by 50bps; and

 

Ended the quarter with a secured debt to total assets ratio of 20%, and $17bn of unencumbered assets.

Japan Airlines selects Vertical Aerospace’s VA-X4 from Avolon’s orderbook for ride sharing business

Avolon, the international aircraft leasing company, and Japan Airlines (‘JAL’), announce a partnership to commercialize zero-emissions eVTOL aircraft in Japan.

 

Avolon, through its investment and innovation affiliate Avolon-e, has formed a strategic partnership with JAL to identify and target local partners and customers, infrastructure requirements, certification, and a range of commercial models to introduce one of the world’s first eVTOL ride sharing businesses in Japan. Through this partnership, JAL will have a right to purchase or lease up to 50 Vertical VA-X4 eVTOL aircraft from Avolon, with the option to purchase or lease up to 50 additional units.

 

Dómhnal Slattery, Avolon CEO, commented: “We continue to identify partners who share the same vision to revolutionise air travel through zero-emissions eVTOL aircraft and shape the future of travel. This latest long-term partnership with JAL aligns us with one of Japan’s leading airlines on their journey to sustainability and to decarbonizing air transport. The VA-X4 will be certified to CAA and EASA’s stringent safety regulations. We believe JAL’s multi-decade experience will prove invaluable as Vertical seeks type certificate validation with the Japan Civil Aviation Bureau, demonstrating that the VA-X4 will be a global eVTOL, unconstrained by borders.”

 

Tomohiro Nishihata, Managing Executive Officer of Japan Airlines, commented: “Today’s announcement represents an important step towards the social implementation of Air Taxi at Osaka Kansai EXPO in 2025. Our partnership with Avolon, lays out the pathway towards achieving Air Mobility revolution in Japan. The introduction of VA-X4 will also contribute to reduce our environmental impact and we fundamentally believe that sustainability will be the engine for future growth across our business and region. We look forward to collaborating closely with Avolon and Vertical on the roadmap to certification for the VA-X4 with the Japan Civil Aviation Bureau.”

 

Stephen Fitzpatrick, Vertical CEO commented: “The VA-X4 will transform how we travel. We are delighted to be working with Avolon and our newest partner Japan Airlines as we bring zero-emissions aircraft to the Japanese market. JAL’s experience will strengthen the certification roadmap in Japan demonstrating our global view as we make eVTOLs a reality.”

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Avolon to partner with IAI, world’s leading independent freighter conversion company, as launch customer for the IAI A330-300 P2F cargo conversion programme

Avolon to partner with IAI, world’s leading independent freighter conversion company, as launch customer for the IAI A330-300 P2F cargo conversion programme

Avolon commits to 30 Airbus A330-300 P2F conversion slots between 2025 and 2028

Air cargo revenues forecasted to be over US$150 billion in 2021 with traffic expected to double over next 20 years reflecting growth in e-commerce

 

Avolon, the international aircraft leasing company, announces a significant commitment to the global air freighter market to capitalise on the growth in e-commerce. Air cargo revenues are forecasted to exceed US$150 billion in 2021 with traffic expected to double over the next 20 years.

 

To capitalise on this clear opportunity, Avolon has signed an agreement with Israel Aerospace Industries (IAI), the world’s leading independent freighter conversion company. Avolon will be IAI’s launch customer for their Airbus A330-300 freighter conversion programme. The agreement will see Avolon partner with IAI on its STC development and take 30 A330-300 conversion slots with IAI between 2025 and 2028.

IAI A330 Freighter

Avolon has identified IAI as the global leader in the passenger-to-freighter (P2F) conversion market. With a range of over 3,600 nautical miles at maximum payload of 61 tonnes, the IAI A330-300 freighter is uniquely placed to support the forecasted growth in e-commerce over the next 20 years. The IAI A330-300 product will offer a competitive edge to air cargo operators looking to expand or replace their medium wide body freighter fleets.

IAI’s A330-300 P2F will increase cargo volume capacity with up to 27 main deck pallet positions, one more than the competition, and will drive enhanced cargo loading performance due to its optimized door position. These product advantages will drive improvements in the most important operating measures for companies in the air freight market.

 

Dómhnal Slattery, Avolon CEO, commented: “We identified IAI as a long-time global leader in the aircraft conversion business and the right partner for Avolon to capitalise on the unparalleled growth in e-commerce. The global air freight market is worth over US$150 billion annually today and the sector is transforming, with air cargo traffic expected to double over the next 20 years. This agreement signals Avolon’s intention to be a leading player in that expansion.

We believe the IAI A330-300 P2F will be the wide body freighter of choice this decade and beyond, replacing retiring aircraft and providing the volume capacity required to meet market needs. In partnering with IAI we have identified the most efficient operator in the freight conversion market, guaranteeing more cargo pallet capacity and crucially, faster turn around times, in a market where every inch and second count.”

IAI President & CEO, Boaz Levy, said: "For the second time in recent years, IAI's Aviation Group is making history. Just two years ago we announced that we will be the first in the world to perform a passenger-to-freighter conversion on the B777-300ER, and today we are announcing that we will perform the cargo conversions for the Airbus A330-300 aircraft. IAI has proven time and again its leading position as the powerhouse of cargo conversions, globally. I am grateful to our partners at Avolon for their faith in our abilities."

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Gol, Brazil’s largest airline and Grupo Comporte, Brazil’s leading transport operator order 250 zero-emission aircraft

Avolon, the international aircraft leasing company, announces a partnership with Gol, Brazil’s largest airline and Grupo Comporte, Brazil’s leading transport operator, to commercialise an eVTOL ride-sharing platform in Brazil.

Avolon, Gol and Grupo Comporte will collaborate to identify and target local partners, infrastructure and certification requirements across a range of commercial models, launching one of the world’s first eVTOL ride-sharing businesses. As part of the agreement, Gol and Grupo Comporte has committed to purchase or lease up to 250 VA-X4 eVTOL aircraft.

The VA-X4, manufactured by Vertical Aerospace, will be the most advanced and safest eVTOL in the market on its introduction in 2024. Avolon is a launch customer for the aircraft which can transport four passengers and one pilot distances of 100 miles at up to 200 miles per hour. eVTOLs are central to the future of transport. They introduce the ultra-short-haul aircraft category to commercial aviation and will revolutionise air travel with VA-X4 zero-emissions aircraft.

Leasing giant Avolon issues second quarter results.....

The leasing giant Avolon has released details of its performance during the second quarter of 2021, at the end of which the firm owned and managed a fleet of 581 aircraft,  with total orders and commitments for 256 new aircraft.

The average age of the owned fleet was just 5.5 years with an average remaining lease term of 6.8 years and the company sold 3 aircraft in the quarter and entered into Letters of Intent for the sale of 12 aircraft as well as completed 48 lease transactions in the quarter comprising new aircraft leases, follow-on leases and lease extensions. 

Some of the other highlights of the quarter included:

   Announced the world’s largest zero emissions eVTOL aircraft order, underscoring Avolon’s commitment to combat climate change;

    Avolon, through its affiliate Avolon-e, became a launch customer for Vertical’s VA-X4 with a commitment for up to 500 electric aircraft valued at $2 billion; and

 Avolon will join Microsoft, Rolls-Royce, Honeywell and American Airlines as equity investors in Vertical.

 

Dómhnal Slattery, Avolon CEO, commented: “We have passed the inflection point and the recovery in global aviation is underway. However, as we have guided previously, the recovery will be uneven across different regions and markets with the pace of vaccine roll-out 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.

Top-level changes

Aircraft leasing company, Avolon issues an update for the second quarter of 2021.

 Avolon, the international aircraft leasing company, issues an update for the second quarter of 2021.   The highlights include: executing a total of 48 lease transactions in the quarter, comprising new aircraft leases, follow-on leases and lease extensions, sold 3 aircraft, and entered into Letters of Intent for the sale of 12 owned aircraft during the quarter. It delivered a total of 8 new aircraft to 6 customers and transitioned 5 aircraft to follow-on lessees. Ended second quarter with a total of 149 airline customers operating in 62 countries and owned and managed fleet of 581 aircraft at quarter end, with total orders and commitments for 256 fuel-efficient, new technology aircraft.

 

During the quarter, rating agencies Moody’s and Fitch improved Avolon’s credit outlook to Stable and the firm announced the world’s largest zero-emissions eVTOL aircraft order, underscoring Avolon’s commitment to combat climate change.

Avolon, through its affiliate Avolon-e, is a launch customer for Vertical’s VA-X4 with a commitment for up to 500 electric aircraft valued at $2 billion and Avolon will join Microsoft, Rolls-Royce, Honeywell and American Airlines as equity investors in Vertical.

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Giant order for up to 500 electric aircraft valued at US$2 billion from leasing firm Avolon

Avolon, one of the leading global aircraft leasing company, and Vertical Aerospace, the most advanced electric vertical take-off and landing (‘eVTOL’) company in the world announce a ground-breaking US$2 billion order for up to 500 electric eVTOL aircraft. This agreement, which is subject to certain closing conditions, will introduce the ultra-short-haul aircraft category to commercial aviation, a game changing development that will revolutionise air travel with zero emissions aircraft.

The agreement will combine Avolon’s scale and deep industry relationships with Vertical’s leading technological position in the eVTOL space and will see both companies collaborate throughout the development, road map to certification and subsequent commercial roll-out of the VA-X4. Avolon will join Microsoft, Rolls-Royce, Honeywell, and American Airlines as equity investors in Vertical, working also with Virgin Atlantic who will be a VA-X4 launch airline customer in Europe.

The order highlights Avolon’s commitment to sustainability and responsible investment and its position as an industry leader and innovator. The commitment to the VA-X4 places Avolon at the forefront of technological change in the industry and underlines Avolon’s belief in the electrification of air transport. Avolon’s existing young and fuel-efficient fleet will be complemented by an investment in a new category of ultra-short-haul aircraft that will produce zero emissions.

Avolon ends Q1 with over $7 billion of available liquidity

Avolon ends Q1 with over $7 billion of available liquidity

 

Avolon, the international aircraft leasing company, announces results for the first quarter (‘Q1’) of 2021.

 

2021 FIRST QUARTER | FINANCIAL HIGHLIGHTS

 

US$ MILLION	Q1 2021	Q1 2020	CHANGE
Lease Revenue	470	644	(174)
Net (Loss)/Income	(83)	141	(224)
Total Available Liquidity	7,057	5,539	1,518
Total Assets	31,099	32,266	(1,167)
Secured Debt / Total Assets	23%	22%	1%
Net Debt to Equity	2.4x	2.3x	0.1x

 

-       Delivered $470 million of lease revenue during the quarter and generated over $117 million of net cash from operating activities in the quarter;

 

-       Ended the quarter with total available liquidity of approximately $7.1 billion, including $2.2 billion of unrestricted cash and $4.8 billion of undrawn debt facilities;

 

-       Raised $1.5 billion of senior unsecured notes at historically low coupon rates of 2.125% and 2.75% for 2026 and 2028 maturities respectively; and,

 

• Ended the quarter with a secured debt to total assets ratio of 23%, and $17.4 billion of unencumbered assets.

Avolon's first-quarter 2021 results.

Avolon, the international aircraft leasing company has announced its results for the first quarter of the year, showing the company delivered a total of 8 new aircraft to 6 customers and transitioned 3 aircraft to follow-on lessees. Avolon also agreed an option to defer 34 single-aisle and 3 twin-aisle order book commitments from the 2022/23 period to 2025 and beyond.

Dómhnal Slattery, Avolon CEO, commented: “While the recovery continues to be uneven, the worst effects of the pandemic on aviation are behind us. As we move towards summer it is clear that the recovery of the sector is firmly underway across the globe. We are seeing definitive signs that demand is increasing in the US and Chinese domestic markets – the two largest domestic markets in the world – with air traffic numbers in those markets projected to reach pre-pandemic levels over the coming months.

New appointments at leasing giant Avolon

Leasing giant Avolon has announced changes to its senior management team - Felipe Campos is the new Chief Technical Officer and Steven Graham to the role of Head of Americas.

Avolon has its headquarters in Ireland, with offices in the United States, Dubai, Singapore, Hong Kong and Shanghai.  It is the world’s third-largest aircraft leasing business with an owned, managed and committed fleet, as of 31 March 2021 of 842 aircraft.

Felipe Campos will bring a wide range of aviation experience to his new position which will be based in Dublin. An engineer by training, Felipe has been Avolon’s head of Latin America, responsible for all of Avolon’s activity in that region since 2016. As a customer focused executive, he will bring deep commercial perspective and strategic insight to his new role.

Before joining Avolon Felipe spent time with GE Aviation and also with the airline groups LATAM and TAM, where he started his career in aviation in 2005. Felipe holds a MSc in Naval Engineering and Project Management from Escola Politécnica at the University of São Paulo. He also holds an MBA from IBMEC.

Steven Graham has been appointed Head of the Americas for Avolon. He has been Head of North America since 2017 and in his new role that will expand to incorporate North and Latin America. Based in New York, he will lead all of Avolon’s activity in these regions.

Steven was one of co-founders of Avolon in 2010. He has a Bachelor of Science (Hons) in Actuarial Mathematics and Statistics from Heriot-Watt University, Edinburgh and is a member of the Institute of Chartered Accountants of Scotland.

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Avolon's first quarter highlights

One of the leading aircraft leasing firms, Avolon,  has released the highlights of its operations during the first quarter of this year, 

The company, with its HQ in Ireland and offices in the United States, Dubai, Singapore, Hong Kong and Shanghai, completed 31 lease transactions during the quarter.  These were made up of new lease deals,  follow-ons and lease extensions as airlines start to emerge from the global shutdown following the pandemic.

Avolon provides aircraft leasing and lease management services to a wide variety of airline clients around the world.  It is the world’s third-largest aircraft leasing business with an owned, managed and committed fleet, as of 31 March 2021 of 842 aircraft.

Q1 Highlights  

 

-       Executed a total of 31 lease transactions in the quarter comprising new aircraft leases, follow-on leases and lease extensions;

 

-       Entered into Letters of Intent for the placement of 27 owned aircraft;

 

-       Sold 2 aircraft during the quarter;

 

-       Delivered a total of 8 new aircraft to 6 customers and transitioned 3 aircraft to follow-on lessees;

 

-       Ended the first quarter with a total of 146 airline customers operating in 61 countries;

 

-       Agreed an option to defer 34 single-aisle and 3 twin-aisle order book commitments from the 2022/23 period to 2025 and beyond, and;

 

-       Owned and managed a fleet of 578 aircraft at quarter-end, with total orders and commitments for 264 fuel-efficient, new technology aircraft.

 

Total available liquidity of approximately $7 billion at quarter-end;

 

Closed a private offering of senior unsecured notes, with an aggregate principal amount of $1.5 billion, and historically low coupon rates of 2.125% and 2.75% for 2026 and 2028 maturities respectively, and;

 

Proactively repaid approximately $740 million of secured debt, $470 million of which continues to be available through revolving facilities.

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Avolon 2020 operational results

Avolon, the international aircraft leasing company, has released details of its results for the 2020 full year.

Total available liquidity of $6.9 billion at year-end and net debt to equity of 2.3x;

Raised $4.4 billion of debt during 2020 at an average cost of 3.7%;

Post financial year-end, in January 2021, issued $1.5 billion of senior unsecured notes at Avolon’s lowest ever public coupon;

Reduced capital and debt principal commitments in the 2020 to 2024 timeframe by over $9.5 billion;

Reduced near-term debt maturities by $1.4 billion through a tender offer for $723m of notes maturing in 2022 and 2023, as well as the opportunistic buyback of $651 million of Avolon senior unsecured notes maturing between 2021-2026, at a discount to par;

Ended 2020 with $4.7 billion of revolving debt capacity, with maturities from 2024 onwards and an undrawn balance of $4.2 billion;

‘Looking to recover' Aircraft leasing giant Avolon publishes outlook paper for 2021

Six ‘Fearless Forecasts’ set for 2021 including the expected growth in aircraft leasing to finance airline fleet renewal

Avolon, the international aircraft leasing company, issued its 2021 outlook paper titled ’Looking to Recovery’. The paper reviews the key trends in the aviation industry for airlines, manufacturers, and lessors, identifying themes that are likely to shape the year ahead and setting out six ‘Fearless Forecasts’ for 2021.

 

The full paper is available at: https://www.avolon.aero/newsroom-and-thoughts

 

Jim Morrison, Head of Portfolio Management at Avolon and author of the 2021 Outlook Paper, commented: “At the start of last year, no one could have foreseen the devastating impact that the COVID-19 pandemic was about to have across the world. 2020 became the most challenging year the commercial aviation industry has ever faced. In response, Governments and aircraft lessors stepped up to support airlines.

2020 was the most challenging year the commercial aviation industry has ever faced, yet leasing giant Avolon performed ll.

There is little room for argument, 2020 was a disastrous year for commercial aviation, the pandemic and resulting border restrictions and closures caused airlines to ground all or most of their fleets of aircraft for weeks and m months at a time. Even now, the industry is teetering on a knife-edge, with many airlines struggling to survive January alone.  It is a sentiment echoed by Dómhnal Slattery, the CEO of aircraft leasing giant Avolon, which has released its latest figures. 

"2020 was the most challenging year the commercial aviation industry has ever faced. The level of airline distress truly tested the resilience of the leasing sector business model. Through Avolon’s decisive actions to reduce our capital commitments, strengthen our liquidity and reduce our future obligations, the business is now well-positioned to benefit from the recovery." Slattery said,  adding: "We steadfastly supported our airline partners through temporary deferrals during the year and have seen cash flows improve in the second half of the year from a low in the second quarter."

Slattery believes it will take a lot of time for the industry to recover and the sped of which is determined on the roll-out of the vaccine as well as massive pre-travel testing programmes. "Air travel will drive economic recovery. It is clear there is a strong desire to travel and latent demand in markets across the world. It is incumbent on Governments to provide appropriate policies to facilitate that demand and drive recovery."

Avolon is, Slattery, contends, well-positioned to face the future and is ready to take up the challenge with positive momentum as the recovery takes hold through 2021.

 Total available liquidity in excess of US$6.5 billion at year-end

 

Avolon: 2020 Second Quarter Results

Avolon, the international aircraft leasing company, announces results for the second quarter of 2020 

2020 SECOND QUARTER | FINANCIAL HIGHLIGHTS

US$ MILLION	Q2 2020	Q2 2019
Lease Revenue	619	678
Impairment & Accelerated Amortisation Charge	(314)	(21)
(Loss)/profit for the quarter	(162)	185
Total Available Liquidity	5,116	6,366
Total Assets	31,805	28,328
Secured Debt / Total Assets	23%	29%
Net Debt to Equity	2.3x	2.1x

Lease revenue for the three months to 30 June was US$619 million;

- Adjusted profit of US$152 million for the quarter, when adjusted for non-cash impairment charges and accelerated amortisation related to airline restructurings, with a net loss of US$162m for the quarter;

- Strong liquidity position at quarter end, with total liquidity in excess of US$5.1 billion;

- Avolon’s capital strength was further enhanced in Q2 with a 34% reduction in near-term capital commitments to the end of 2021, resulting in a year to date cumulative 52% reduction in capital commitments in the 2020-2023 timeframe;

- Buyback of US$639 million of Avolon senior unsecured notes maturing between 2021-2024, at a discount to par, realizing a net gain of $61m and further reducing near-term debt maturities;

Avolon updates its position

Avolon, the international aircraft leasing company, has issueed an update for the second quarter of 2020

- Maintained a strong liquidity position at quarter end, with total liquidity (including unrestricted cash and undrawn secured warehouse facilities) in excess of US$5 billion;

- Avolon’s capital strength was further enhanced in Q2 with a 34% reduction in near-term capital commitments to the end of 2021, resulting in a year to date cumulative 52% reduction in capital commitments in the 2020-2023 timeframe;

- Executed the opportunistic buyback of US$639 million of Avolon senior unsecured notes maturing between 2021-2024, at a discount to par, further reducing near-term debt maturities;

- As at 30 June, many of our customers had entered into short-term rental deferral arrangements or were in arrears on their rental obligations. As a result, Avolon’s aggregate increase in trade receivables and deferred revenue asset implied a lease revenue collection rate during the first half of 2020 of 68%, with two thirds of the collection shortfall related to deferral arrangements;