Avation PLC on Friday said it swung an interim profit despite revenue falling, as it significantly reduced its aircraft impairment loss.
The Singapore-based passenger aircraft leasing firm said 2022 pretax profit was $6.7 million, swinging from a loss of $15.9 million in 2021.
This was despite revenue falling 8.0% to $55.3 million from $60.1 million.
Amid various costs, and gains or losses on investments and rights, aircraft impairment loss dropped by 97% to $315,000 from $9.9 million. Finance income multiplied to $3.3 million from $330,000, while finance expenses fell 9.4% to $31.7 million from $35.0 million.
‘During the six months ended December 31, Avation reduced the number of off-lease aircraft in the fleet from six to four. In addition, the sale of a Boeing 737-800 in February 2023 has further reduced the number of off-lease aircraft to three,’ said Executive Chair Jeff Chatfield.
‘A key strategic aim for Avation over the coming months is to conclude sales or lease agreements for all remaining off-lease aircraft and we are pleased to announce that we have recently concluded a lease agreement with a new airline customer for one of the three remaining aircraft.’
Looking ahead, Avation said it anticipates significant demand for leased aircraft in the short-to-medium term, as the airline industry continues its post-pandemic recovery.
It noted an International Air Transport Association report that domestic air travel in December recovered to around 80% of its 2019 level, while international air travel recovered to around 75%.
‘After the recovery from the Covid-19 pandemic, Avation plans to re-grow its business in an organic prudent and sensible manner. We will target organic growth, which includes the placement of the remaining off-lease aircraft and leasing the two ATR aircraft we have on order for delivery in 2024,’ Chatfield said.
‘Few aircraft were built during the Covid-19 pandemic so lessors that own them have seen positive developments in valuations. As an owner we have managed to move, sell, service and, most importantly, transition aircraft. We are reasonably confident that the company will be able to place its remaining inventory of off-lease aircraft and arrange leases for the two new aircraft ordered for delivery in 2024.’
On Thursday, Avation signed a lease agreement for an ATR 72-600 aircraft with a new airline customer in the Pacific region.
It said the aircraft was repossessed in August 2022, following the default of an airline in Myanmar. The aircraft is due to be delivered to the new customer for a lease term of 24 months.
Shares in Avation were up 4.8% to 132.00 pence each in London on Friday morning.
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