• Wed. Oct 5th, 2022

Avation PLC reports improved liquidity and revenue collection as airline industry recovers

The commercial aircraft leasing company ended December with $121 million in cash in the bank and 42 planes in its fleet

Avation PLC (LSE:AVAP) said it has sold the first of three ex-Virgin Australia (ASX:VAH) ATR72-600s to Aegean Airlines and expects to see improved results over the past half year as the airline industry is experiencing a “gradual recovery” from the COVID-19 pandemic.

The sale of three ATR aircraft to Aegean, in addition to the sale of an Airbus A321 and an Airbus A220 announced since the beginning of the financial year on July 1, will increase liquidity and generate approximately $42 million in net proceeds total.

The commercial passenger jet leasing company ended December with $121 million in cash in the bank and 42 planes in its fleet, 50% of which were modern narrow-body commercial jets and the average age was 5.3 years with a remaining lease term of 6.0 years.

Prior to the final audit, it was calculated that the fleet had unearned contract revenue from operating leases of $575 million and an additional $64 million in minimum lease payments receivable under lease agreements -funding.

The collection rate in December was 171% of contracted revenue, compared to a rate of 91% for a full year.

Executive Chairman Jeff Chatfield said: “We are seeing the airline industry experience a gradual recovery from COVID-19, with most of our airline customers having navigated towards stabilizing activity levels.

“We expect the first half results to show some improvement, although it will still be a loss.

“The company is seeing improvements in liquidity, revenue collection and a gradual stabilization of business.

“The company expects significant revenue in the coming months from the sale of aircraft, the payment of creditor by the administration of Virgin Australia and the restructuring of PAL, as well as the continued collection of accounts receivable. and operating cash flow.”