Aircraft Lessor Avolon Reports Y/Y Decrease in Lease Revenue for Q1/23

Aircraft lessor Avolon reported that it delivered lease revenue of $599 million in Q1/23, down from $658 million in Q1/22. The company also reported $56 million in adjusted net income during the quarter, down from $80 million in Q1/22, and $310 million of net cash from operating activities, down from $320 million in Q1/22.

Avolon ended Q1/23 with $5.527 billion in total available liquidity, down from $5.567 billion at the end of 2022, and $30.224 billion in total assets, down from $30.796 billion at the end of 2022. The company’s net debt to equity remained at 2.3 times, matching its mark at the end of 2022.

During Q1/23, Avolon executed 31 lease transactions, delivered nine new aircraft, transitioned nine aircraft, agreed to letters of intent for the sale and leaseback of 12 aircraft, sold two aircraft, agreed to letters of intent for the sale of 13 more aircraft, and added three new customers. At the end of the quarter, the company now has 147 airline customers operating in 65 countries and an owned and managed fleet of 578, with total orders and commitments for 252 aircraft. Avolon’s averaged owned fleet has an age of 6.3 years and an average remaining lease term of 6.9 years. Its orderbook is fully placed for 2023 and 82% placed for 2024.

Following the end of the quarter, Avolon agreed to terms for an order of 40 Boeing 737 Max aircraft, with the aircraft scheduled to deliver between 2027 and 2030. Once the order is finalized, Avolon’s pro-forma owned, managed and committed fleet will rise to 870 aircraft.

“Avolon benefitted from rising lease rates during the quarter as global passenger traffic continued to grow and the reopening of the Chinese market provided an important catalyst for increased travel in the region,” Andy Cronin, CEO of Avolon, said. “Demand for aircraft remains strong, with high levels of leasing activity and a continued shortage of aircraft. This is supporting residual values and driving demand for lease extensions from airlines unable to access new deliveries. Our commitment with Boeing for 40 new 737 MAX aircraft reflects our confidence in the long-term outlook for the aviation sector. With our low leverage and high levels of liquidity, we are well positioned to take advantage of future opportunities.”

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