UK Leasing

Avation PLC Says Cash Position Improves As Airline Recovers


Avation will emerge from the pandemic with a smaller fleet with high usage levels

Avation PLC expects its cash position and liquidity to improve in the coming months as the airline industry begins to recover from the coronavirus crisis.

The civil aircraft lessor has also scheduled the end of 2022 when it will start to develop again.

The company had been hit by two high-profile Covid-related failures at Virgin Australia and Philippines Airlines.

Avation executive chairman Jeff Chatfield said, however, that the filing of a voluntary Chapter 11 restructuring request by Philippine Airlines should resolve one of its latest fleet leasing flaws.

Air travel that is starting to pick up will also help cash flow and the value of planes, he added.

“The end of the pandemic seems in sight with the deployment of global vaccination programs supporting a return to growth in the number of passengers.

“A return of air travel to pre-COVID levels could lead to an increase in the value of planes which could reverse some of the write-downs in future periods.”

Avation recorded a loss of US $ 70.2 million for the fiscal year ended June 2021 after an impairment charge of US $ 87.4 million and expected credit losses of US $ 25.4 million due to a disruption of the coronavirus.

Revenue fell 13% to $ 117.7 million, although cash and bank balances rose 7% to $ 122.5 million and net debt fell 11% to $ 923 million .

Avation added that the focus on preserving liquidity and cash flow has left the fleet, operations and customers virtually untouched and that, although capital spending and dividends remain temporarily on hold, it is expected to start again. increase its fleet at the end of 2022.

Chatfield added: “The year ending June 30, 2021 has been the most difficult in the history of the company.

“[The]The decision to preserve liquidity and cash flow ensured survival and allowed a focus on the maintenance of the business, customers and leasing platform which were preserved as the impacts of the pandemic is fading and air travel is coming back.

He added that the lessor would emerge from the pandemic with a smaller fleet with high usage levels and a long repayment period for the company’s unsecured loan notes after their maturity was extended until October 2026.

“Avation’s cash and liquidity position is expected to improve in the coming months with the expected sale of underutilized aircraft and the receipt of distributions to creditors from the restructuring administrations of Virgin Australia and Philippine Airlines.

“This will have the combined effect of improving operational efficiency and increasing liquidity which can then be used to continue to repay debt and finance a return to fleet growth expected at the end of 2022.”


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