Commercial airline leasing group Avation (AVAP ) is nearly back to business as usual after Covid disruption, it revealed in an update of its cash position and inventory as of 30 June 2022.
On 30 June, Avation had total cash of US$118.9m, and had repaid secured loans by US$55.6m in H1. Avation has already transitioned 17 of the 20 aircraft returned to it as a result of Covid-19, with the 3 remaining expected to be sold or leased by the end of the calendar year. Full year results are expected around 6 October.
The company has 39 commercial aircraft leased to 17 airlines in 14 countries, with a further two on order 28 long-term purchase rights over ATR72 planes. The average age of its fleet is 5.7 years with an average remaining lease term of 5.7 years and total future minimum lease payments of £557m.
Avation expects to complete a sale of two ATR72 aircraft in July and August 2022, and expects to lease one ATR72-500 to a new customer in July. Upon completion of these transactions, Avation will have only 3 unutilised aircraft leftover from over 20 returned or repossessed during the pandemic.
Avation said it expects its cash position and liquidity to be "positively impacted by the settlement of aircraft sales, re-financing of existing aircraft, collection of the creditor pay-out expected from Virgin Australia and the continued collection of rent arrears from customers in the first half of the new financial year."
Executive Chair Jeff Chatfield shared an optimistic outlook: "We observe that the airline industry experiencing a rapid recovery with activity levels of most of our airline clients close to and in some cases above pre-COVID levels. The results for the year are expected to reflect that the company has successfully navigated the pandemic and is experiencing improved cash collection rates, higher aircraft valuations and fleet utilisation.
...
It is our opinion that aircraft valuations will trend upwards as air travel recovers. The company believes that the market has now returned to a position where the demand for aircraft exceeds supply."
Avation seems to have completed a near-full recovery from the pandemic. It has transitioned nearly all of its aircraft, maintained liquidity, and reduced its debt during the fiscal year. AVAP shares were up 4.86% on the news today and up 8.57% in the last 5 days
Follow News & Updates from Intelligent Avation: