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 an improvement in its results for the past half-year as the air travel industry experiences 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 start of the financial year on 1 July, will increase liquidity and release roughly US$42mln in aggregate net proceeds.
The commercial passenger aircraft leasing company finished December with US$121mln of cash in the bank and 42 aircraft in its fleet, of which 50% where modern narrowbody commercial aircraft and the average age was 5.3 years with remaining lease duration of 6.0 years.
Prior to final audit, it was calculated that the fleet has unearned contracted revenue from operating leases of $575mln and an additional $64mln of minimum lease payments receivable under finance leases.
The cash collection rate in December was at 171% of contracted revenues compared with a full-year rate of 91%.
Executive chairman Jeff Chatfield said: "We see the air travel industry experiencing a gradual recovery from COVID-19 with most of our airline clients having navigated to stabilization of activity levels.
"We expect that the results for the first half will demonstrate certain improvements, albeit remain a loss.
"The company sees improvements in liquidity, revenue collections and a gradual stabilisation of the business.
"The company expects material receipts in the coming months from the sale of aircraft, the creditor pay out from the Virgin Australia administration and the PAL restructuring as well as continued collection of debtors and cashflow from operations."