Avation Plc (LON:AVAP), the commercial passenger aircraft leasing company, has published its annual report for the year ended 30 June 2025.
Financial Highlights
· Revenue increased by 19.2% to $110.1 million (2024: $92.4 million);
· Lease yield was 11.3% (2024: 10.7%);
· EBITDA increased by 20.3% to $107.1 million (2024: $89.0 million);
· Operating cashflow increased by 12.2% to $91.5 million (2024: $81.6 million);
· Net indebtedness reduced by 7.3% to $604.2 million (2023: $651.5 million);
· Net debt: EBITDA reduced to 5.6x (2024: 7.3x);
· Total year-end cash and bank balances were $130.0 million (2024: $117.9 million) and $148.5 million (unaudited) at 26 September 2025;
· Operating profit was $46.4 million (2024: $83.2 million);
· Loss after tax was $7.7 million (2024: profit $19.7 million);
· Basic earnings per share were (11.22) cents (2024: 27.85 cents);
· Net asset value per share increased to $3.66 (2024: $3.62); and
· Dividend of 1.0 US cents per share declared.
Operational Activity
· The Company acquired an Airbus A320-200 aircraft on lease to Etihad Airways;
· Two new ATR 72-600 aircraft were sold on delivery to an airline customer generating a $3.5 million gain on sale;
· The lease for an Airbus A320-200 aircraft to easyJet was extended to March 2029;
· An ATR 72-600 was transitioned to a six-year lease with a new customer Clic Air;
· The first two ATR 72-600 aircraft in Avation’s ten aircraft orderbook were placed on lease with new airline customers in South Korea and Cambodia. The aircraft are scheduled for delivery in November 2025 and February 2026 respectively;
· The Company was granted a 5-year extension to its Singapore Aircraft Leasing Scheme tax incentive;
· The Company agreed to sell a Boeing 777-300ER aircraft in a transaction generating a material profit above book value in the 2026 financial year; and
· The Company obtained new corporate credit ratings from Moody’s and Fitch of B1 (stable) and B (stable) respectively.
Executive Chairman, Jeff Chatfield, said:
“The financial year ended 30 June 2025 was a period of consolidation for Avation. The fleet performed well with all aircraft on lease throughout the period. We successfully transitioned an ATR 72-600 to a new lessee customer Clic Air, extended the lease of an A320-200 aircraft with easyJet and recently signed leases for the first two aircraft to be delivered from our ten aircraft orderbook with ATR. We also added Etihad Airways to our customer list in March 2025 with the purchase of an Airbus A320-200 and sold two ATR 72-600 aircraft to their lessee pursuant to the exercise of purchase options. Further fleet optimisation was achieved in early September 2025 with the sale of a Boeing 777-300ER widebody aircraft at a material profit above book value. We intend to use the sale proceeds to reduce debt and to reinvest into popular narrowbody aircraft types.
Cash generation was strong, enabling the Company to further reduce debt, achieving a reduction to 54.8% in the ratio of net debt to total assets as at 30 June 2025. We have made significant repurchases of the Avation Capital S.A. 8.25% October 2026 unsecured notes issue, reducing the outstanding amount to US$310.0 million at 30 June 2025 and to US$298.0 million as of today’s date.
The Company now has a strong focus on refinancing the remaining outstanding unsecured notes which are currently due to mature in October 2026. In preparation for a refinancing transaction, we recently updated our Global Medium Term Note programme documentation and engaged Moody’s and Fitch Ratings to provide additional credit ratings on the Company. We are pleased to note that Moody’s assigned the Company a first-time B1 Corporate Family Rating (CFR) and B2 issuer rating with a stable outlook, and Fitch Ratings assigned the Company a B long-term issuer default rating. We believe that we are now well positioned to achieve a successful refinancing of the Notes.
Avation plans to grow its business in a prudent and strategic manner. The first two of the ten new ATR 72-600 aircraft on order have been placed with new customers and we are confident that the Company will be able to place the remaining ordered aircraft in a timely manner. The order was placed by exercising ten purchase rights and the company holds another 24 purchase rights, providing opportunities for further fleet growth.
The Board is pleased to reward shareholders with an interim dividend of 1.0 US cents per share in respect of the 2025 financial year.”
Financial Summary
| US$ ‘000s | Year ended 30 June, | |
| 2025 | 2024 | |
| Revenue | 110,099 | 92,397 |
| Other income | 2,448 | 3,575 |
| 112,547 | 95,972 | |
| Operating profit | 46,444 | 83,218 |
| (Loss)/Profit before tax | (9,722) | 30,046 |
| (Loss)/Profit after tax | (7,716) | 19,735 |
| EPS (basic) | (11.22c) | 27.85c |
| US$ ‘000s | 30 June, | |
| 2025 | 2024 | |
| Fleet assets (1) | 819,807 | 832,818 |
| Total assets | 1,101,935 | 1,142,321 |
| Total cash and bank balances (2) | 129,975 | 117,940 |
| Cash and cash equivalents | 48,102 | 23,561 |
| EBITDA (3) | 107,063 | 88,999 |
| Funds from operations (FFO) (4) | 62,186 | 37,356 |
| Net asset value per share (US$) (5) | US$3.66 | US$3.62 |
| Net asset value per share (GBP) (6) | £2.67 | £2.85 |
1. Fleet assets are defined as property, plant and equipment plus assets held for sale plus finance lease receivables.
2. Total cash and bank balances as at 30 June 2025 comprise cash and cash equivalents of US$48.1 million (30 June 2024: US$23.6 million), investment in fixed deposits of US$1.0 (2024: US$nil) and restricted cash balances of US$80.8 million (30 June 2024: US$94.4 million).
3. EBITDA is a non-GAAP measure of financial performance calculated as profit before tax plus finance expenses plus depreciation plus impairment charges plus unrealised loss on aircraft purchase rights and pre-delivery deposits paid.
4. FFO is a non-GAAP measure of financial performance calculated as EBITDA minus interest expense minus current tax expense.
5. Net asset value per share is total equity divided by the total number of shares in issue, excluding treasury shares.
6. Based on GBP:USD exchange rate as at 30 June 2025 of 1.37 (30 June 2024:1.27).
We use EBITDA and FFO to assess our consolidated financial and operating performance, and we believe these non-GAAP measures are helpful in identifying trends in our financial performance.
Aircraft Fleet
| Aircraft Type | 30 June 2025 | 30 June 2024 |
| ATR 72-600 | 13 | 15 |
| ATR 72-500 | 4 | 4 |
| Airbus A220-300 | 5 | 5 |
| Airbus A320-200 | 3 | 2 |
| Airbus A321-200 | 6 | 6 |
| Airbus A330-300 | 1 | 1 |
| Boeing 777-300ER | 1 | 1 |
| Total | 33 | 34 |
At 30 June 2025, Avation’s fleet comprised 33 aircraft, including three aircraft on finance lease. Avation serves 16 customers in 14 countries. The weighted average age of the fleet is 8.5 years (30 June 2024: 7.3 years) and the weighted average remaining lease term is 3.9 years (30 June 2024: 4.1 years).
One Airbus A320-200 aircraft was acquired and two ATR 72-600 aircraft were sold during the period. Turboprop and narrowbody aircraft make up 83% of fleet assets as at 30 June 2025. Fleet assets have decreased 1.6% to US$819.8 million (30 June 2024: US$832.8 million) as a result of aircraft sales and depreciation. As at the date of this report, Avation’s fleet is fully utilised. Subsequent to the year-end a Boeing 777-300ER aircraft was sold.
Avation has orders for ten new ATR 72-600 aircraft and purchase rights for a further 24 aircraft at 30 June 2025. The order-book and purchase rights provide a pathway to future fleet growth.
Debt summary
| US$ ‘000s | 30 June, | |
| 2025 | 2024 | |
| Current loans and borrowings | 70,084 | 49,668 |
| Non-current loans and borrowings | 582,253 | 625,426 |
| Total loans and borrowings | 652,337 | 675,094 |
| Cash and cash equivalents | 48,102 | 23,561 |
| Net indebtedness (1) | 604,235 | 651,533 |
| Net debt to total assets (2) | 54.8% | 57.0% |
| Weighted average cost of secured debt (3) | 5.2% | 4.8% |
| Weighted average cost of total debt (4) | 6.6% | 6.4% |
1. Net indebtedness is defined as loans and borrowings less unrestricted cash and bank balances.
2. Net debt to assets is defined as net indebtedness divided by total assets.
3. Weighted average cost of secured debt is the weighted average interest rate for secured loans and borrowings at period end.
4. Weighted average cost of total debt is the weighted average interest rate for total loans and borrowings at period end.
During the period net indebtedness was reduced by 7.3% to US$604.2 million (30 June 2024: US$651.5 million). Seven aircraft were re-financed with long-term floating rate debt in the year.
The weighted average cost of total debt has increased to 6.6% as at 30 June 2025 (30 June 2024: 6.4%) due to repayments of lower cost secured loans in the period and refinancing aircraft with higher cost floating rate loans, offset by repayments of unsecured notes. The weighted average cost of secured debt increased to 5.2% at 30 June 2025 (30 June 2024: 4.8%).
At the end of the financial period, Avation’s net debt to total assets ratio improved to 54.8% (30 June 2024: 57.0%). As at 30 June 2025, 84.2% of total debt was at fixed or hedged interest rates (30 June 2024: 96.4%). The ratio of unsecured debt to total debt was 45.3% (30 June 2024: 44.8%).
Financial Analysis
Revenue
| US$ ‘000s | Year ended 30 June, | |
| 2025 | 2024 | |
| Lease rental revenue | 89,935 | 87,749 |
| Less: amortisation of lease incentive assets | (3,141) | (2,721) |
| 86,794 | 85,028 | |
| Interest income from finance leases | 1,219 | 2,018 |
| Maintenance reserves revenue | 22,086 | 5,351 |
| 110,099 | 92,397 | |
Lease rental revenue increased by 2.5% to US$89.9 million in the year ended 30 June 2025 from US$87.7 million in the year ended 30 June 2024. The increase was principally due to increased utilisation of the fleet in the year ended 30 June 2025 and the addition of an Airbus A320-200 aircraft to the fleet in March 2025.
Interest income from finance leases decreased by 39.6% from US$2.0 million in the year ended 30 June 2024 to US$1.2 million in the year ended 30 June 2025. The decrease was principally due to the sale of two ATR 72-600 aircraft pursuant to the exercise of purchase options during the year.
Maintenance reserves income increased to US$22.1 million in the year ended 30 June 2025 compared to US$5.4 million in the year ended 30 June 2024. A review of forecasted maintenance events across the fleet resulted in adjustments to the expected timing of several major maintenance events to beyond the end date of the current leases. This is expected to result in lower maintenance reserve reimbursements during the current lease terms and is the major contributing factor to the increase in maintenance reserve income this year.
Other income
| US$ ‘000s | Year ended 30 June, | |
| 2025 | 2024 | |
| Foreign currency exchange gain | – | 807 |
| Claim recovery | 682 | 443 |
| Fees for late payment | 1,364 | 1,828 |
| Deposit released | – | 350 |
| Others | 402 | 147 |
| 2,448 | 3,575 | |
Fees for late payment reduced by 25.4% from US$1.8 million in the year ended 30 June 2024 to US$1.4 million in the year ended 30 June 2025 due to a corresponding reduction in customer arrears.
Claim recoveries recognised in other income are the balance of distributions paid to creditors of Virgin Australia in excess of amounts allocated to trade receivables.
Foreign currency exchange gains which were reported in the year ended 30 June 2024 did not reoccur as the weakening US dollar caused exchange losses reported in other expenses in the year ended 30 June 2025.
Administrative expenses
| US$ ‘000s | Year ended 30 June, | |
| 2025 | 2024 | |
| Staff costs | 5,682 | 5,487 |
| Other administrative expenses | 3,444 | 3,305 |
| 9,126 | 8,792 | |
Staff costs increased by 3.6% from US$5.5 million in the year ended 30 June 2024 to US$5.7 million in the year ended 30 June 2025 principally due to inflationary salary increments offset by lower charges for employee share warrants.
Other administrative expenses increased by 4.2% from US$3.3 million in the year ended 30 June 2024 to US$3.4 million in the year ended 30 June 2025 principally due to inflationary increases to audit and accounting costs and general office overheads.
Other operating income and expense items
| US$ ‘000s | Year ended 30 June, | |
| 2025 | 2024 | |
| Depreciation | (37,512) | (37,251) |
| Gain on derecognition of a finance lease | – | – |
| Gain/(loss) on disposal of aircraft | 3,455 | (2,915) |
| Unrealised (loss)/gain on aircraft purchase rights | (21,643) | 46,886 |
| Unrealised loss on equity investment | (1,630) | (490) |
| Reversal of/(impairment loss) on aircraft | 4,831 | (5,573) |
| Aircraft transition expenses | (244) | (2,607) |
| Reversal of expected credit losses | 80 | 239 |
| Legal and professional fees | (1,978) | (2,251) |
| Other expenses | (2,336) | – |
Depreciation increased by 0.7% from US$37.3 million to US$37.5 million due to the addition of an Airbus A320-200 aircraft to the fleet in March 2025.
Two new ATR 72-600 aircraft were sold on delivery to an airline customer in the year generating gains on disposal of US$3.5 million. Avation terminated a lease of an ATR 72-500 aircraft to an Indian airline in the year ended 30 June 2024. The aircraft was repossessed from the airline and subsequently sold, generating a loss on sale of US$2.9 million.
The Company’s 24 aircraft purchase rights were revalued at 30 June 2025 using a Black-Scholes option pricing model. The principal factors leading to the recognition of a loss of US$21.6 million (2024: US$ 46.9 million gain) were a decrease in risk-free interest rates and a reduction in the time to expiry of the purchase rights.
The Company recorded an unrealised loss of US$1.6 million on its holding of shares in Philippine Airlines, Inc. (2024: US$0.5 million). The Company received these shares as part of the settlement awarded to creditors in the bankruptcy restructuring of the airline in December 2021.
Previously recognised impairment losses of US$4.8 million were reversed in the year ended 30 June 2025 due to firmer residual values used in the company’s lease encumbered valuation model for aircraft. The market environment has been supportive for aircraft values recently due to strong demand for aircraft and constrained supply of new aircraft. Avation recognised US$5.6 million of impairment losses in the year ended 30 June 2024.
Aircraft transition expenses of US$0.2 million (2024: US$2.6 million) represent repairs and maintenance expenditure on aircraft incurred during the transition of aircraft during the year. The Company expects transition expenses to remain low in future periods as all aircraft in the fleet are currently on lease.
The net reversal of expected credit losses of US$0.1 million (2024: US$0.2 million expense) primarily results from reduced rent arrears. Current trade receivables (excluding allowances for credit losses) were US$6.3 million at 30 June 2025, reduced from US$8.2 million at 30 June 2024.
Legal and professional fees reduced by 12.1% from US$2.3 million in the year ended 30 June 2024 to US$2.0 million in the year ended 30 June 2025 due to reduced transaction activity.
Other expenses of US$2.3 million in the year ended 30 June 2025 represent foreign currency exchange losses on the group’s Euro denominated bank loans.
Finance income
| US$ ‘000s | Year ended 30 June, | |
| 2025 | 2024 | |
| Interest income | 4,706 | 6,009 |
| Fair value gain on financial derivatives | – | – |
| Finance income from discounting non-current deposits to fair value | 629 | 652 |
| Gain on repurchase of unsecured notes | – | 675 |
| Gain on early full repayment of borrowings | 960 | 2,507 |
| 6,295 | 9,843 | |
Interest income decreased in the year ended 30 June 2025 principally due to lower available rates for cash deposits and lower interest income on amounts due under a customer payment plan agreement which was fully repaid by 30 June 2025.
Avation generated a gain of US$0.7 million in the year ended 30 June 2024 on the repurchase of US$18.0 million of Avation Capital S.A. 8.25%/9.0% unsecured notes at a discount.
Gains on early repayment of borrowings of US$1.0 million (2024: US$2.5 million) arose on termination of interest rate swaps when seven aircraft loans were refinanced. As at the date of this announcement the company has six unencumbered aircraft.
Finance expenses
| US$ ‘000s | Year ended 30 June, | |
| 2025 | 2024 | |
| Interest expense on secured borrowings | 17,033 | 20,047 |
| Interest expense on unsecured notes | 26,924 | 29,321 |
| Amortisation of loan transaction costs | 1,979 | 1,571 |
| Amortisation of IFRS 9 gain on debt modification | 13,885 | 10,709 |
| Fair value loss on financial derivatives | 1,188 | 405 |
| Amortisation of interest expense on non-current borrowings | 628 | 635 |
| Loss on repurchase of unsecured notes | 599 | – |
| Others | 225 | 327 |
| 62,461 | 63,015 | |
Interest expense on secured borrowings reduced by 15.0% to US$17.0 million in the year ended 30 June 2025 from US$20.0 million in the year ended 30 June 2024 as a result of net repayments of secured loans. Secured borrowings have been paid down by US$16.2 million from US$372.8 million at 30 June 2024 to US$356.6 million at 30 June 2025.
Interest expense on unsecured notes reduced by 8.2% to US$26.9 million in the year ended 30 June 2025 from US$29.3 million in the year ended 30 June 2024 as a result of repurchases of unsecured notes. The company repurchased US$21.6 million face value of Avation Capital S.A. 8.25%/9.0% unsecured notes during the year.
Interest expense on unsecured notes in the year ended 30 June 2024 also includes US$4.3 million of non-cash interest paid in kind by increasing the face value of Avation Capital S.A. 8.25%/9.0% unsecured notes.
Amortisation of IFRS 9 gain on debt modification of US$13.9 million (2024: US$ 10.7 million) represents the non-cash accretion in the book value of Avation Capital S.A. 8.25%/9.0% unsecured notes resulting from the accounting treatment of the extension and changes to the terms of the notes agreed with noteholders in March 2021. The extension was accounted for as a substantial modification of a debt instrument in accordance with IFRS 9. The face value of Avation Capital S.A. 8.25%/9.0% unsecured notes outstanding as of 30 June 2025 is US$310.0 million (30 June 2024: US$331.6 million).
Dividend
The Board has declared an interim dividend of 1.0 US cents per share in respect of the financial year ended 30 June 2025. The timetable for the interim dividend is as follows:
Ex-dividend date: 16 October 2025
Record date: 17 October 2025
Payment date: 30 October 2025
Interim Management Statement
According to IATA, passenger air travel grew at 8.0% in the year to 30 April 2025. International travel continued to show strong momentum with 10.8% year-on-year growth in revenue passenger kilometres. A decline is air travel in the United States was more than offset by strong growth in other regions. In the Asia-Pacific region, where Avation’s fleet and customer base is concentrated, revenue passenger kilometres grew 10.6% year-on-year.
At the same time, supply chain constraints continue to impact new aircraft deliveries. New aircraft deliveries are lagging 30% behind peak levels, leading to a record aircraft order backlog of around 17,000 aircraft.
This market backdrop has continued to support aircraft valuations and lease rates over the last year with Avation seeing increases in values and lease rates for both new and second-hand commercial aircraft.
Avation’s fleet was fully utilised throughout the year ended 30 June 2025. The Company is now focussed on placing its ATR 72-600 orderbook with new customers and transitioning aircraft which are due to come off lease in the latter half of 2025 and first half of 2026 to new lessees. To this end the first two deliveries from Avation’s ten aircraft orderbook have been placed with new airline customers in South Korea and Cambodia. These aircraft are currently scheduled for delivery in November 2025 and February 2026 respectively. The Company transitioned an ATR 72-600 aircraft to a six-year lease with new customer Clic Air in July 2025 and has signed a six-year lease with existing customer PNG Air for an aircraft scheduled to be redelivered by its existing lessee in the fourth quarter of 2025.
The Company will continue to focus on growing its fleet, transitioning aircraft scheduled for redelivery from expiring leases and identifying opportunities to place the remaining new ATR aircraft ordered in 2024.
Avation aims to gradually transition to a more sustainable, lower CO2 emissions aircraft fleet. Aircraft delivered from Avation’s orderbook and exercised purchase rights will be fitted with the new Pratt and Whitney Canada PW127XT engine. The PW127XT engine promises 20% lower maintenance costs, extended time on wing, 3% lower fuel consumption and 5% more power compared with the current engine variant. The PW127XT engine is capable of operating with 50% SAF* and manufacturer expects to achieve certification to operate with 100% SAF before new fuel regulations planned for 2030. Net emissions of CO2 are expected to be substantially reduced when using SAF.
We also anticipate gradually trading out of older aircraft types and focussing on aircraft types such as the Airbus NEO and A220 series in addition to ATR turboprop aircraft. The Company’s portfolio already includes a significant proportion of Airbus A220 and ATR 72 aircraft.
*Sustainable aviation fuel or SAF is the main term used by the aviation industry (including IATA and the International Civil Aviation Organization) to describe a non-conventional (non-fossil derived) aviation fuel. SAF is the preferred IATA term for this type of fuel although when other terms such as sustainable alternative fuel, sustainable alternative jet fuel, renewable jet fuel or biojet fuel are used, in general, the same intent is meant.
Market Positioning
Avation’s long-term strategy is to target growth and diversification by adding new airline customers, while maintaining a low average aircraft age and long remaining lease term metrics. Avation focuses on new and relatively new commercial passenger aircraft on long-term leases. In the short term the Company is considering further growth in its narrow body fleet.
Avation supports the transition of the aircraft industry towards aircraft capable of using SAF to produce lower CO2 emissions on a net basis. Reducing CO2 emissions is key to providing a sustainable future for the global aviation industry and in addressing climate-change risks.
The Company’s business model involves rigorous investment criteria that seeks to mitigate the risks associated with the aircraft leasing sector. Avation will typically sell mid-life and older aircraft and redeploy capital to newer assets. This approach is intended to mitigate technology change risk, operational and financial risk, support sustained growth and deliver long-term shareholder value.
Avation will consider the acquisition or sale of individual or smaller portfolios of aircraft, based on prevailing market opportunities and consideration of risk and revenue concentrations.
Funding for aircraft acquisitions is traditionally sourced from capital markets, asset-backed lending, operational cash flows and disposals of aircraft. The ability to access acceptably priced funding is a key profit driver in aircraft leasing.
Principal risks factors facing the aircraft leasing industry include, but are not limited to, exposure to the airline industry and the risk of deterioration in the financial condition of airline customers, asset value risk driven by changing patterns of supply and demand and technological change, operational risks including risks resulting from war, acts of terrorism and natural disasters, regulatory risks from changes to government regulations and tax laws and climate-change risks.
The Directors may seek to repurchase ordinary shares in the Company from time to time subject to the terms of a share buy-back mandate which expires at the conclusion of the next Annual General Meeting.
Results Conference Call
Avation’s senior management team will host an investor update call on 2 October 2025, at 1:00 pm BST (UK) / 8:00 am EST (US) / 8:00 pm SGT (Singapore), to discuss the Company’s financial results. Investors can participate in the call by using the following link:
https://sparklive.lseg.com/Avation/events/4870afb6-d37d-4859-8135-af1d8c2c268d/avation-plc-full-year-results-call
A replay of the broadcast will be made available on the Investor Relations page of the Avation PLC website.
