Lease revenue at Avolon rises in third quarter

Dublin-based aircraft lessor Avolon said revenue rose in the third quarter as demand for aircraft remained strong and lease rates rose.

But overall net income was down 1 per cent year on year when the impact of the company’s withdrawal Russia was taken into account, and 31 per cent lower overall.

The company said net income for then three months was $97 million, up 28 per cent on the second quarter, and a total of $229 million to date. In the third quarter of 2022, net income was $141 million, and $104 million when adjusted.

Lease revenue rose 8 per cent year on year to $588 million, Avolon said. The company executed 43 lease transactions included new aircraft leases, follow-on leases and lease extensions, and delivered seven new aircraft to customers.

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It also sold 14 aircraft and has letters of intent for the sale of a further 15 aircraft.

During the three months, Avolon also confirmed an order for 20 A330 Neo aircraft.

By the end of the quarter, Avolon had an owned and managed fleet of 568, with total orders and commitments for 329 fuel-efficient, new technology aircraft. It has 147 airline customers in 65 countries.

The quarter also saw a strong performance in operating cashflow, up 125 per cent to $626 million. It also recorded a 21 per cent reduction in receivables and deferred balances over the quarter.

By the end of the quarter, Avolon had total available liquidity of $7.5 billion, including US$630 million of unrestricted cash and US$6.9 billion of undrawn debt facilities.

“The third quarter showed the continuing positive trajectory of our financial performance, helped by strong demand for aircraft and rising lease rates,” said chief executive Andy Cronin. “We continued to support our customers’ demand for capital and have underwritten US$2.9 billion in new sale and leaseback volume year to date. These transactions, along with lease extensions and aircraft placed from our orderbook at attractive lease rates, will drive our long-term profitability. We expect the current strong demand for travel and undersupply of aircraft to remain for the foreseeable future.”