Avation PLC AGM Statement (4517U)
November 23 2023 - 1:40AM
UK Regulatory
TIDMAVAP
RNS Number : 4517U
Avation PLC
23 November 2023
Via RNS and SGXNET
AVATION PLC
("Avation" or "the Company")
CHAIRMAN'S AGM STATEMENT
Avation PLC (LSE: AVAP), the commercial passenger aircraft
leasing company, will hold its Annual General Meeting today in
Singapore which will include the following Chairman's Statement.
The purpose of this statement is to provide investors with an
update on current operations.
Market
In its most recent air passenger market analysis report IATA
noted continued strength in air travel with revenue passenger
kilometres ("RPKs") increasing 30.1% in the year to September 2023.
Total market RPKs are now around 97% of pre-COVID levels comparing
September 2023 to the same month in 2019.
Market values for aircraft have continued to recover and Avation
believes that values of popular new narrowbody aircraft types have
increased by 10-15% since January 2022.
Fleet Update
As at 23 November 2023 Avation owns a fleet of 35 aircraft
leased to 15 airlines in 13 countries. The average age of the fleet
is 6.7 years, and the average remaining lease term is 4.9 years.
The earliest lease expiry date is September 2024.
Three aircraft are currently in transition, with one ATR 72-600
aircraft expected to be sold, and with an ATR 72-600 and an Airbus
A320 expected to start new leases in the coming weeks. Since 30
June 2023 Avation has sold a twelve-year old ATR 72-500 aircraft
which was repossessed from an airline in India which was in default
under the lease agreement.
In responding to an analyst question, the Company advised that
has no exposure on its A320 / A321 fleet to technical problems
associated with the Geared Turbo Fan engine recall.
Strategic and Finance Update
Avation has continued to make progress with collections of rent
and maintenance arrears. Total arrears have reduced by around US$
6.3 million since 30 June 2023. The company's management remains
highly focussed on collections of the remaining arrears balances.
Furthermore, the company expects to receive a final distribution
from the administrator of Virgin Australia of around AU$ 1.0
million in December.
Total cash and bank balances have increased by US$ 23.8 million
since 30 June 2023 to US$ 140.7 million at the current date. The
company will look for opportunities to refinance existing loans and
buy-back outstanding unsecured Notes in the coming months.
The Company's broker was approached over the summer in relation
to a potential takeover offer, however, while the board diligently
contemplated the proposal, the broker was ultimately unable to
verify the funding package of the potential bidder and discussions
were therefore brought to a close.
Executive Chairman, Jeff Chatfield, said:
"With the recovery of travel to pre-COVID levels in an
environment characterised by a shortage of viable aircraft; lessors
are well placed. We believe that about 60% of all aircraft
deliveries are being funded by lessors. In our view the current
market conditions give us cause to believe this to be an optimistic
time for lessors. After the challenges of the COVID era and the
recent challenge of rapidly rising interest rates, the Company has
the belief that the stock exchange listed lessors, such as Avation,
and a few select Sovereign backed lessors should benefit. In
contrast, pure private equity backed or primarily debt backed
lessors will find this current commercial environment challenging,
their investors return requirements may outstrip airlines' ability
to pay lease rents. Public equity backed operating lessors such as
Avation along with our listed peers are well placed to prosper in
such an environment. Avation is fortunate enough to have a very
strategic, environmentally friendly orderbook thus allowing a
growth pathway. Avation's growth pathway will allow it over time to
manage the transition to new green technology low CO2 aircraft. The
Company is optimistic in its long-term outlook.
Avation recently celebrated its thirteenth year as a main board
listed company on the London Stock Exchange".
-ENDS -
Enquiries:
Avation PLC - Jeff Chatfield, Executive Chairman +65 6252 2077
Avation welcomes shareholder questions and comments and advises
the email address is: investor@avation.net
Notes to Editors:
Avation PLC is an aircraft leasing company, headquartered in
Singapore, owning and managing a fleet of commercial passenger
aircraft which it leases to airlines around the world. More
information on Avation is available at www.avation.net.
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END
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