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Avation inks leasing agreements five former Virgin Australia aircraft

The agreements include the leasing of two ATR 72-500s to another commercial airline in Australia until the end of 2021

Avation PLC - Avation inks leasing agreements for former Virgin Atlantic aircraft

Avation PLC (LON:AVAP) said it has entered commercial agreements to lease five aircraft that were formerly used by Virgin Australia, which went into administration in April.

The company said it has agreed to lease two former Virgin Australia ATR 72-500s to another commercial airline in Australia until the end of 2021 at current market leasing rates.

READ: Avation ends strategic review and formal sale process

Avation also said it had signed a conditional letter of intent for another former Virgin Australia ATR 72-500 with an airline customer for an operating lease period of five years at current market rates.

Meanwhile, the firm has entered finance leases for the sale of its last two Fokker 100 aircraft over September at a price 6% above book value.

In a statement, Avation executive chairman Jeff Chatfield said: "We are optimistic that Virgin Australia will be sold by the Administrator and that the eventual buyer should see the value in maintaining and indeed growing the regional network using Avation's remaining ATR 72-600s as a part of the future business. We feel it prudent to mitigate our overall risk by selling down and transitioning certain of the aircraft given the uncertainty that surrounds the present [coronavirus] environment."

"Given this unusual and disrupted environment, Avation is pleased and grateful that its marketing team was able to establish a lease with new clients", he added.

Avation shares were steady at 170p in late-morning trading on Friday.

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Price: 132 GBX

LSE:AVAP
Market: LSE
Market Cap: £82.72 m
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