Avation PLC (LSE:AVAP) said it will only buy and lease low CO2 emission aircraft going forward with the existing fleet to be "transitioned" as and when leases expire.
Ahead of its AGM, the civil aircraft lessor said that currently its fleet comprises 39 aircraft with an average age of 6 years and an average remaining lease term of 5.3 years.
The next aircraft scheduled to come off lease is not until September 2023 and October 2025 after that.
Avation added that although flying hours are increasing post-Covid, there is still significant disruption to aircraft servicing and repair, which has led to delays in planes being sold or transitioned, but this issue should ease through 2023.
Cashflow from operations is expected to improve as the sector returns to pre-Covid trading conditions and Avation said it will look at retiring more senior unsecured debt as the opportunity arises.
“During the remainder of the financial year aircraft sales, collections of receivables from customers and the insolvency proceedings of Virgin Australia (ASX:VAH) in addition to cashflow from operations should support opportunities for a return to fleet growth,” it added.