Avolon Continues Expansion of its Fleet and Customer Base In 2021

Rhea-AI Summary

Avolon reported strong performance in Q4 and FY 2021, highlighted by delivering 49 new aircraft and executing 229 lease transactions, leading to a 4% increase in their fleet to 592 aircraft. They successfully raised $3.7 billion in debt at a low cost of 2.5% and increased their revolving debt capacity to $5.9 billion. Avolon also announced a groundbreaking $2 billion order for up to 500 VX4 eVTOL aircraft, signaling a commitment to zero emissions. S&P, Moody's, and Fitch reaffirmed their investment-grade rating with a stable outlook.

Positive

• Raised $3.7 billion in debt capital at a historically low cost of 2.5%.
• Increased total revolving debt capacity from $4.8 billion to $5.9 billion.
• Delivered a total of 49 new aircraft in 2021, executing 229 lease transactions.
• Owned and managed fleet increased by 4% to 592 aircraft.
• Placed 70% of VX4 order book with major airlines, indicating strong demand.
• Announced a $2 billion order for up to 500 VX4 eVTOL aircraft, focusing on zero emissions.

Negative

• The aviation industry continues to face challenges due to new COVID-19 variants, which may impact future operations.

-  S&P, Moody’s and Fitch reaffirmed Avolon’s investment grade rating with Stable outlook;

-  Raised $3.7bn of debt capital at a cost of 2.5% and increased total revolving debt capacity from $4.8 to $5.9 billion;

-  Delivered, transitioned and sold a total of 91 aircraft; executed 229 lease transactions during 2021;

-  Owned and managed fleet increased by 4% to 592 aircraft during 2021;

-  Announced the world’s largest zero emissions eVTOL aircraft order with Vertical Aerospace, underscoring Avolon’s commitment to combat climate change;

-  Placed 70% of the VX4 order book with GOL and JAL;

-  Launch customer for the IAI A330-300 P2F cargo conversion programme to capitalise on the global growth in e-commerce.

DUBLIN--(BUSINESS WIRE)-- Avolon, the international aircraft leasing company, issues an update for the fourth quarter (‘Q4’) and 2021 full year (‘FY’).

Reviewing 2021, Dómhnal Slattery, CEO Avolon, commented:“As we predicted at the start of the year, 2021 was shaped by the rapid distribution and take-up of vaccines, which resulted in the progressive easing of government travel restrictions and a strong rebound in global air travel. The scale of pent up demand for travel, and airlines moving to meet that demand, resulted in our fourth quarter being the most active period for leasing activity in our history. It is clear that the aviation industry will continue to face challenges in 2022 given new variants, but that market backdrop creates opportunities for us, and the fundamentals of the sector remain strong. As we look ahead, we are optimistic that both our platform and our people will continue to meet the challenges we face and seize the opportunities to thrive in the year ahead.

2021 saw Avolon make its landmark investment in zero-emissions aircraft. Both our investment in, and our orderbook with, Vertical Aerospace – which successfully listed on the New York Stock Exchange in December – will prove to be a game-changer. eVTOLs are the first step towards a revolution in air travel and the strong demand for our VX4 orderbook from the world’s leading airlines shows that our airline partners share this view. We look forward to continuing to work with our customers to decarbonise air travel and work towards a net zero carbon economy.”

Q4 FLEET METRICS & BUSINESS HIGHLIGHTS

- Executed a total of 95 lease transactions in the quarter comprising of new aircraft leases, follow-on leases and lease extensions;

- Delivered a total of 25 new aircraft to 8 customers and transitioned 6 aircraft to follow-on lessees;

- Entered into Letters of Intent for the sale and leaseback of 40 aircraft;

- Sold 12 aircraft; and

- Fangda Group‘s investment into the HNA group of airlines for an ownership stake of c. 25% recapitalises and strenghtens these airlines which account for 11% of our portfolio.

2021 FULL YEAR HIGHLIGHTS

FY FLEET HIGHLIGHTS

- Delivered a total of 49 new aircraft and transitioned 23 aircraft to a total of 30 customers;

- Executed a total of 229 lease transactions comprising new aircraft leases, follow-on leases, lease extensions, and sale agreements for 16 aircraft;

- Owned and managed fleet of 592 aircraft at year end, with total orders and commitments for 232 fuel-efficient, new technology aircraft;

- Entered into sale and leaseback Letters of Intent commitments for 45 aircraft;

- Sold 24 aircraft in 2021, 5 of which were managed;

- Added 14 new customers during 2021, for a total of 150 airline customers operating in 62 countries;

- Partnered with IAI to become the launch customer for the IAI A330-300 P2F cargo conversion programme, with a commitment for 30 conversion slots between 2025 and 2028;

- Ground-breaking $2 billion order for up to 500 VX4 eVTOL zero emissions aircraft; and

- Placed 70% (or 350 units) of this VX4 eVTOL order, with GOL and Japan Airlines.

FY FINANCIAL HIGHLIGHTS

- Maintained strong credit metrics resulting in S&P, Moody’s and Fitch reaffirming Avolon’s Investment Grade credit rating with Stable outlook;

- Upsized unsecured revolving facility by $1.1 billion to $4.3 billion, bringing total revolving debt capacity to $5.9 billion at year end;

- Extended the maturity date of unsecured revolving facility from 2024 to 2026;

- Successfully raised $3.7 billion of new debt, at a historcally low average cost of 2.5%; and

- Extended $2 billion of unsecured note maturities to 2027 and reduced the weighted average interest rate from 5.31% to 2.53%.

ENDS

About Avolon

Headquartered in Ireland, with offices in the United States, Dubai, Singapore, Hong Kong and Shanghai, Avolon provides aircraft leasing and lease management services. Avolon is 70% owned by an indirect subsidiary of Bohai Leasing Co., Ltd., a public company listed on the Shenzhen Stock Exchange (SLE: 000415) and 30% owned by ORIX Aviation Systems, a subsidiary of ORIX Corporation which is listed on the Tokyo and New York Stock Exchanges (TSE: 8591; NYSE: IX). Avolon is the world’s second largest aircraft leasing business with an owned, managed and committed fleet, as of 31 December 2021 of 824 aircraft.

Website: www.avolon.aero
Twitter: @avolon_aero

Note Regarding Forward-Looking Statements

This document includes forward-looking statements, beliefs or opinions, including statements with respect to Avolon’s business, financial condition, results of operations and plans. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond our control and all of which are based on our management’s current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as “believe,” “expects,” “may,” “will,” “could,” “should,” “shall,” “risk,” “intends,” “estimates,” “aims,” “plans,” “predicts,” “continues,” “assumes,” “positioned” or “anticipates” or the negative thereof, other variations thereon or comparable terminology or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. Forward-looking statements may and often do differ materially from actual results. No assurance can be given that such future results will be achieved.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220110005482/en/

Ross O’Connor

Head of Capital Markets

roconnor@avolon.aero

T: +353 1 231 5818

Emmet Moloney

Head of Communications

emoloney@avolon.aero

T: +353 1 556 4429

Jonathan Neilan

FTI Consulting

avolon@fticonsulting.com

M: +353 86 231 4135

Source: Avolon

FAQ

What were Avolon's major achievements in 2021?

Avolon delivered 49 new aircraft, executed 229 lease transactions, and raised $3.7 billion in debt capital.

How has Avolon improved its financial position?

Avolon increased total revolving debt capacity to $5.9 billion and achieved a low debt cost of 2.5%.

What is the significance of Avolon's order for VX4 eVTOL aircraft?

The $2 billion order for up to 500 VX4 eVTOL aircraft underscores Avolon's commitment to zero emissions and reflects strong demand from airlines.

Who reaffirmed Avolon's investment-grade rating?

S&P, Moody's, and Fitch reaffirmed Avolon's investment-grade rating with a stable outlook.

What challenges does Avolon anticipate in 2022?

Avolon anticipates challenges in the aviation industry due to new COVID-19 variants.