Aircastle reported a 14.3% increase in total revenues to $255.5 million in Q2/20, but noted that total lease rental and direct financing and sales-type lease revenues fell 12% to $176.9 million.

The aircraft lessor also reported a net loss of $191 million due to net non-cash aircraft impairment charges of $197.9 million and adjusted EBITDA of $244.8 million, which was up 16.1%.

In Q2/20, Fitch Ratings affirmed Aircastle’s senior unsecured debt rating at BBB with a stable rating outlook. In addition, Aircastle executed a $150 million revolving credit facility with Mizuho Bank and repaid $300 million of senior unsecured 7.625% coupon debt in April.

As of July 31, Aircastle had approximately $1.5 billion of liquidity and $5.7 billion of unencumbered aircraft. The company has no new aircraft purchase commitments until 2021 and agreements in place to sell 21 narrow-bodies as they come off lease. Aircastle approved rent deferral arrangements with 40 airlines for approximately $99 million, including $61 million that appeared in its consolidated balance sheet.

As of Aug. 1, Aircastle had total liquidity of $1.5 billion, which includes unrestricted cash of $371 million, $600 million of undrawn credit facilities, $117 million of contracted asset sales and $419 million of projected operating cash flows through Aug. 1, 2021. The company also reported a net book value of $5.7 billion in unencumbered flight equipment and $717 million of total adjusted contractual commitments through Aug. 1, 2021, including $500 million of notes due in March 2021.

“The current impact of the pandemic on the aviation sector has been severe and the industry may take several years to recover. Because Aircastle has operated with a strong liquidity position, minimal forward commitments and low balance sheet leverage, we are well situated to enhance our market position and strengthen our company when the aircraft leasing industry emerges from the COVID-19 crisis,” Mike Inglese, CEO of Aircastle, said. “With the strong strategic ownership of Marubeni Corporation and Mizuho Leasing and our healthy stand-alone credit profile, Aircastle’s investment grade credit rating was recently affirmed at BBB by Fitch Ratings, with a stable outlook. Of the 10 aircraft lessors rated by Fitch, we were one of two having a stable outlook. Aircastle is dedicated and focused on maintaining a liquid balance sheet, and a conservative and balanced capital allocation strategy. We are optimistic about the long-term viability of global aviation, and our thoughts remain with all who have been impacted by the COVID-19 crisis.”

As of June 30, 2020, Aircastle owned 274 aircraft with a net book value of $7.2 billion. The company also manages nine aircraft with a net book value of $321 million dollars on behalf of a joint venture with Mizuho Leasing.

During Q2/20, Aircastle recorded net non-cash, transactional and fleet review impairment charges on 16 aircraft totaling $197.9 million, after partially offsetting maintenance and other revenue of $82.2 million. The transactional impairments were mostly driven by certain customers filing for protection status and bankruptcy. Aircastle also recorded additional non-cash impairment charges associated with two aircraft.

As of Aug. 1, 2020, Aircastle has executed documents or approved deferral arrangements with 40 lessees representing 50% of its customer base. The amount deferred is approximately $99 million, including $61 million that appeared on Aircastle’s June 30, 2020 consolidated balance sheet. This represents approximately 12% of Aircastle’s reported lease rental and direct financing and sales-type lease revenues for the trailing 12 months ended June 30, 2020. The average deferral is four months and structured to be repaid by the end of 2020 or early 2021 with interest.

Aircastle acquires, leases and sells commercial jet aircraft to airlines.