Avation PLC (LON:AVAP) said it has managed to maintain profitability despite a “challenging year” affected by the coronavirus (COVID-19) pandemic and that it is “optimistic about the medium term opportunity for air travel”.
In an AGM trading update, the commercial aircraft leasing firm reported a pre-tax profit for the year to June 30, 2020, of US$14.7mln, adding that lease revenue in the period rose by 14% to US$135.3mln.
Reporting on its operations from July 1, Avation said it has provided support to 14 of its airline customers during the pandemic with agreements to defer a total of US$13.7mln in lease payments, adding that it has mitigated the impact of this on its cashflow by rescheduling US$26.5mln of loan amortisation. As of December 23, the company said seven airline customers of a total of 19 have returned to normal monthly rental levels.
Meanwhile, Avation said since July 1 its airline customers have begun to return to service, with airlines representing over 79% of unearned contracted revenue flying at greater than 50% of pre-COVID-19 levels, although it said the sector “remains challenged” despite these service levels.
Looking ahead, the firm said the pandemic continues to dominate the industry and it expects that there will be “continuing work” to support airlines as challenges facing the sector continue despite the rollout of vaccines around the world.
Despite this, Avation said it is optimistic about the medium-term opportunity in the sector, particularly for turboprop and narrow-body aircraft, adding that it will “position itself for a return to growth through opportunistic purchases and delivery of its orderbook in a post-pandemic environment”.
"Avation's team has been managing airlines, bankers and finances on a daily basis in the duration of COVID-19. We have an opinion that air travel passenger movements will exceed previous levels when a treatment or vaccine is deployed, and passengers perceive air travel to be safe. Therefore, post COVID-19 we remain optimistic and expect significant opportunities for a rapid return to growth", executive chairman Jeff Chatfield said in the AGM statement.