Avation PLC (LSE: AVAP) share price was down as the commercial passenger aircraft leasing company, held its Annual General Meeting today in Singapore, where Executive Chairman Jeff Chatfield provided an optimistic update on market dynamics, fleet activity, and financial progress.
Market Dynamics
Avation highlighted robust demand in the aviation sector, with air travel metrics surpassing pre-pandemic levels. IATA reported a 7.1% annual increase in revenue passenger kilometres through October 2024. The ongoing supply chain constraints have further supported market values and lease rates for commercial aircraft, with narrowbody aircraft values up approximately 5% over the past year.
Fleet Update
Avation owns a fleet of 32 aircraft with an average age of 7.8 years and a remaining lease term of 3.8 years. Key updates include:
- Sales and Leases:
- Sold two ATR 72-600s in August 2024, generating net cash of $10 million.
- Secured a lease extension for a 15-year-old Airbus A320 at higher rates in October 2024.
- Sold a new ATR 72-600 in November 2024, realizing $5 million to fund pre-delivery payments for upcoming ATR orders.
- 2025 Activity:
- Three returning aircraft have been successfully placed with new lessees.
- Two new ATR 72-600s, scheduled for 2025 delivery, are leased to airlines in Japan and Korea.
Financial Position
The company reduced Covid-related arrears by $6.4 million and improved liquidity with $18.6 million in additional cash, bringing total balances to $136.5 million. Avation repurchased 7.8 million shares for 150p each, viewing this as a value-accretive move.
Outlook
Chatfield expressed confidence in Avation’s growth potential, driven by its orderbook of 10 ATR aircraft for delivery between 2025 and 2028 and favorable market conditions. The company remains focused on enhancing shareholder value through share buybacks and plans to reinstate dividends.
This update underscores Avation’s robust operational and financial performance, positioning it well for continued growth amid strong market dynamics.
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