viewAvation PLC

Avation expects to report record half-year revenues

The company's business continues to perform satisfactorily

Avation PLC -
The ATR 72-600 benefits from the widest cabin in the turboprop market

Aircraft leasing firm Avation PLC (LON:AVAP) expects the fall-out from the failure of travel firm Thomas Cook will have little impact on its revenues.

Management took swift action to repossess the two Airbus A321-200 aircraft it had leased to Thomas Cook and the company has since had an existing customer sign a letter of intent to lease the aircraft from next month. The aircraft also remain available for sale, the company revealed, in a statement issued ahead of its annual general meeting today.

Avation said it expects to report growth in lease rental revenues for the second half of 2019 but gains on the sale of aircraft will be lower than the comparable period of 2018.

Management estimates that lease rental revenue for the second half of 2019 will increase by 12% to around US$65.2mln from US$58.2mln in the second half of last year.

Avation is currently assessing jet aircraft for acquisition, in addition to scheduled deliveries of new ATR 72-600 aircraft from its order book.

Following the delivery of the four aircraft to Nordic airline Braathens, the company will have five remaining orders for ATR 72-600 aircraft for delivery between October 2020 and April 2022 and 25 purchase rights for additional ATR 72 aircraft for delivery prior to December 2025.

Meanwhile, finance leases for two Fokker F100 aircraft will complete in December 2019 and ownership of the aircraft will be transferred to the current lessee airline. The aircraft will be 26 and 28 years old respectively at the time of the conclusion of the leases.

Avation added that the finance leases for the remaining three Fokker F100 aircraft in the fleet will end during the calendar year 2020.

"Avation's team can be commended for the rapid repossession, maintenance, marketing and repositioning of the two ex-Thomas Cook aircraft. Remarketing ability is key to any aircraft leasing company. This episode has demonstrated the importance of Avation's focus on young, popular aircraft as evidenced by the number of airlines who expressed interest in leasing these two Airbus A321-200 aircraft,” said Jeff Chatfield, the executive chairman of Avation.

“Avation has continued to deliver organic growth and expects to report record revenue for the first half-year financial period,” he added.


Quick facts: Avation PLC

Price: 100.3 GBX

Market: LSE
Market Cap: £62.86 m

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