Avation PLC (LSE:AVAP) has told investors it is optimistic about the long-term opportunity in air travel, and, it intends to be positioned for a return to growth.
The company, in a statement ahead of today’s AGM, identified in particular opportunities in the turbo-prop and narrow-body aircraft sectors, whilst guiding that it aims to grow “through opportunistic purchases and delivery of its orderbook in a post-pandemic environment.”
In the meantime, the company expects upcoming liquidity supports to underpin its finances for this anticipated period of growth.
“In the coming months aircraft sales, collections of receivables from customers and the insolvency proceedings of Virgin Australia (ASX:VAH) and PAL in addition to cashflow from operations should provide Avation with sufficient cash to support a return to fleet growth in 2022,” Avation said.
The company added that it will consider aircraft sale and leaseback opportunities or opportunistic purchases from lessors or airlines in the coming year.
It also noted that it will consider applying cash to de-lever the balance sheet with a specific focus on the outstanding Avation Capital senior notes, due October 2026.
“Avation does not provide guidance as to the value of any future repurchases or the split between applying cash to fleet growth and de-leveraging which will be driven by market conditions at the relevant time,” it added.
Updating on cash flow, the company said they are improving as the return to normal trading conditions continues as countries open-air travel to vaccinated travellers.
Avation highlighted that its top five customers, which account for 70% of monthly revenue are either current or in compliance with repayment plans.
The company noted, meanwhile, that it is current with all payments to secured lenders, and, it is either in compliance with or has received temporary waivers in respect of all financial covenants in place with secured lenders.
As of 1 December, the company's fleet comprised 42 aircraft.