International aircraft leasing company Avolon reported lease revenues for Q2/20 were $619 million and adjusted profit of $152 million for the quarter, when adjusted for non-cash impairment charges and accelerated amortization related to airline restructurings, with a net loss of $162 million for the quarter.
Avolon also reported:
As of June 30, Avolon reported that many 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. During Q2/20, 12 of Avolon’s customers were due to start repayments at the scheduled expiry of their deferral arrangements. According to Avolon, seven of these customers made payments in full and five customers have fallen into arrears or sought an extension to their short-term rental deferral arrangement for some or all of their rental obligations.
Q2/20 Operational Highlights
“The second quarter was undoubtedly a challenging period for the aviation sector, and our results clearly show the impact of this crisis. The lockdown of the global economy caused severe disruption to the demand for air travel and uncertainty remains around the pace and timing of a recovery,” Dómhnal Slattery, CEO of Avolon, said. “Based on our experience, we have taken decisive action since the start of the year. Ee have removed US$7.9 billion of near-term capital commitments and bought back US$639 million of our unsecured bonds at a discount to par, all while maintaining over US$5 billion of total liquidity. These actions enhanced our capital strength and provide a strong foundation to support our customers in this critical period and to manage our business through the recovery. While at an early stage, we have seen traffic trends in certain markets that suggest that the structure and quality of our portfolio leaves us well positioned to take advantage of the recovery when it does take hold.”
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