In its Q3/20 update, international aircraft leasing company Avolon reported total liquidity (including unrestricted cash and undrawn secured warehouse facilities) in excess of $5.5 billion. The company also reported that it closed a private offering of $650 million senior unsecured notes with a 2026 maturity in the quarter.

Avolon’s lease revenue collection rate trended upwards during Q3/20 but continues to be impacted by deferral arrangements and late payments. As a result, Avolon’s aggregate increase in trade receivables and deferred revenue asset implied a year-to-date lease revenue collection rate of more than 80%. In addition, during Q3/20, 28 of Avolon’s customers were due to start repayments at the scheduled expiry of their deferral arrangements. Twenty four of these airlines started repayments, in some cases under amended repayment terms. The remaining balance are either in arrears or subject to an extension of their deferral period.

In terms of fleet metrics, Avolon delivered four new aircraft and transitioned one aircraft to a follow-on lessee; sold one aircraft, representing the final aircraft to be sold to the Sapphire 2020-1 vehicle; and executed a total of 55 lease transactions in the quarter comprising new aircraft placements, follow-on leases, lease extensions and 15 sale and leaseback transactions.

Avolon had an owned and managed fleet of 551 aircraft at the end of Q3/20, with total orders and commitments for 286 new technology aircraft and a total of 145 airline customers in 61 countries.

“Our prudent approach to risk management and strong capital structure sets Avolon apart in the leasing sector. These attributes were again evident in our performance in Q3, as we maintained liquidity in excess of US$5 billion, as we have done throughout 2020,” Dómhnal Slattery, CEO of Avolon, said. “We continue to maintain a close dialogue with our customers, and we have seen an upward trend in our lease revenue collection rate through Q3. Our team continues to actively manage our portfolio and executed over 50 lease transactions in the quarter, including a number of new sale and leaseback transactions, highlighting the opportunities available for well capitalized lessors. While the timeframe for the normalization of air travel remains uncertain, we have the liquidity, industry relationships and management experience to position the business for continued long-term success.”