Avation PLC (LON:AVAP), the commercial passenger aircraft leasing company, has announced unaudited results for the six months ended 31 December 2025.
Financial Highlights
· Revenue and other income increased to US$56.0 million (2024: US$55.4 million);
· Operating profit increased to US$29.3 million (2024: US$18.8 million);
· Total cash was US$104.8 million (30 June 2025: US$130.0 million) after paying cash for a new ATR 72-600 in December 2025;
· Ten aircraft unencumbered at 31 December 2025 (30 June 2025: six);
· Net indebtedness reduced by US$61.5 million to US$542.7 million (30 June 2025: US$604.2 million), representing 54.7% of total assets (30 June 2025: 54.8%);
· In November 2025 Avation Group (S) Pte Ltd issued US$300 million 8.5% unsecured notes due May 2031. The proceeds were used to fully redeem the group’s outstanding 8.25% unsecured notes due 2026;
· Ratio of net debt to EBITDA improved to 5.1x (30 June 2025: 5.6x); and
· Net asset value per share increased by 2.6% to £2.74 (30 June 2025: £2.67).
Operational Highlights
· In October 2025 the Company agreed a four-year extension to a lease for an Airbus A330-300 widebody aircraft with EVA Air. The lease will now run to November 2031;
· In August 2025 Avation sold a Boeing 777-300ER widebody aircraft realising a gain of US$4.1 million;
· In December 2025 Avation took delivery of a new ATR 72-600 which has been placed on a 12-year lease to Korean airline Sum Air; and
· Two ATR 72-600 aircraft have recently been transitioned to new 6-year leases with existing customers PNG Air and Clic Air. A third ATR 72-600 aircraft is due to transition to a new 6-year lease with a Croatian airline in March.
Overview
Avation PLC is a commercial passenger aircraft leasing company focused on the acquisition, leasing and management of modern, fuel-efficient commercial aircraft. The Company’s strategy is to generate stable long-term cash flows through secured lease contracts with airline counterparties globally, supported by disciplined capital management.
The Company derives the majority of its income from fixed-rate operating lease rentals and associated maintenance reserve contributions.
Avation continued to focus on:
· Maintaining high fleet utilisation;
· Securing long-term lease agreements with creditworthy counterparties;
· Active asset management and remarketing;
· Strengthening the balance sheet through refinancing and maturity extension; and
· Identifying opportunities to acquire new and used aircraft to grow the portfolio.
This report should be read in conjunction with the Company’s Annual Report and Audited Financial Statements for the year ended 30 June 2025.
Market
According to IATA, in 2025 global passenger traffic grew 5.3% year-on-year. Both domestic and international passenger traffic growth moderated in 2025. Domestic traffic increased by 2.4% year-on-year, while international traffic expanded by 7.1%. Passenger load factors increased to 83.6%, the highest on record for any year. Continued growth in the overall air travel market is supportive for commercial aircraft leasing.
Fleet and Leasing Activity
The number of aircraft in Avation’s fleet is unchanged since 30 June 2025 at 33 aircraft following the sale of a Boeing 777-300ER in August 2025 and delivery of a new ATR 72-600 aircraft in December 2025. The fleet is set to grow through nine further deliveries of ATR 72-600 aircraft on order from the manufacturer. The nine ordered aircraft are scheduled for delivery between the second quarter of this year and the second quarter of 2028.
The first of these nine aircraft is scheduled for delivery in April 2026 and will be placed on lease to Cambodia Airways for 12 years. A second aircraft, scheduled for delivery later this year, has also been placed with Cambodia Airways on a 12-year lease. A total of four new aircraft deliveries are expected this year, based on the manufacturer’s current production schedule.
Avation was pleased to conclude a four-year extension to the lease of its remaining widebody aircraft in October. This extension, which was agreed more than two years ahead of the scheduled expiry of the lease, is an indicator of the continued strong demand for leased aircraft.
Two ATR 72-600 aircraft have been transitioned to new lessees recently following the expiry of their lease to Mandarin Airlines. A third aircraft will be transitioned to a new lessee in March. Avation has one additional ATR 72-600 aircraft coming off lease in May and is currently in discussion with prospective new lessees for the aircraft.
Avation’s customer for two ATR 72-600 aircraft Braathens Regional Airways AB entered administration in October 2025 and the Company has terminated the leases for both aircraft. The aircraft were both redelivered to Avation recently and the Company is currently seeking replacement lessees. The Company is still evaluating the financial impacts, if any, of the termination of the leases to Braathens.
Avation was recently notified that following a technical failure, one of its Airbus A220-300 aircraft on lease to Air Baltic has been classified as unrepairable and is deemed to be a total loss. Avation will receive an insurance claim settlement of US$33.4 million as compensation for loss of the aircraft which is in line with its book value. It is expected that the claim settlement will be paid shortly.
Capital Structure and Financing
The Company was pleased to close the issuance of US$300 million 8.5% unsecured notes due May 2031 in November 2025 (“Notes”). The new Notes, which represent just over 50% of Avation’s total debt, provide the Company with a stable long-term capital structure, support operational stability, and remove the near-term refinancing risk inherent in the group’s previous note issue which was due to mature In October 2026.
The Notes are rated B by Fitch Ratings, B2 by Moody’s and B by S&P Global Ratings. The rating agencies also provide corporate ratings for Avation of B (outlook stable), B1 (outlook stable) and B (outlook stable) respectively.
During the period the Company repurchased 5,181,996 ordinary shares at an average price of 147 pence per share and issued a total of 890,978 shares pursuant to exercises of employee and bondholder warrants. As a result of these actions the number of shares in issue less treasury shares has been reduced by 6.4% from 66,588,737 at 30 June 2025 to 62,297,739 at 31 December 2025.
The Company paid an interim dividend of 1.0 US cents per share in respect of the financial year ended 30 June 2025 in October 2025.
The Group continues to manage leverage levels prudently, with a focus on maintaining adequate headroom under debt facilities and compliance with financial covenants.
Avation Executive Chairman, Jeff Chatfield, said:
“We are pleased to present these results for the six-month period ended 31 December 2025 which show continued stable cash flow generation from a fully utilised fleet with ten unencumbered aircraft.
We are particularly pleased to report the successful refinancing of our near-term unsecured debt obligations with a new long-dated issue of US$300 million unsecured Notes in November 2025. The extended maturity for the new Notes creates stability in our capital structure and provides a platform for future fleet growth.
The result for the period includes the final expenses recorded in relation to amortisation of the 2021 accounting gain on modification of the terms of our previous bond issue and the full redemption of the bonds in November 2025. These non-cash expenses, totalling US$13.0 million, are non-recurring and stripping their impact from our half-year results reveals the underlying strength of the Company’s financial performance.
Demand for passenger air travel continues to grow steadily and long OEM order backlogs, supply chain issues and delays to new aircraft deliveries are all supportive for aircraft lessors such as Avation. These factors have contributed to increased demand for lease extensions, which is notably illustrated by our agreement of a four-year lease extension with EVA Air for an Airbus A330-300 widebody aircraft in October 2025. This extension was negotiated over two years ahead of the scheduled expiry date for the lease.
Avation enters the second half of the financial year with a contracted lease portfolio providing visibility of cash flows, extended debt maturities following the successful refinancing of our unsecured debt obligations and continued demand for leased aircraft amid constrained new aircraft supply.
Management remains focused on portfolio optimisation, disciplined capital allocation and maintaining financial flexibility.
The Board believes that the Company is well positioned to navigate prevailing market conditions while continuing to generate long-term shareholder value.”
Financial Summary
| US$ ‘000s | Six months ended 31 December, | |
| 2025 | 2024 | |
| Revenue | 55,547 | 52,980 |
| Other income | 454 | 2,468 |
| 56,001 | 55,448 | |
| EBITDA (1) | 54,027 | 55,553 |
| Operating profit | 29,258 | 18,816 |
| Profit/(loss) before tax | (5,681) | (9,769) |
| Profit/(loss) after tax | (4,901) | 868 |
| EPS | (7.56c) | 1.23c |
| US$ ‘000s | 31 December 2025 | 30 June2025 |
| Fleet assets (2) | 744,836 | 819,807 |
| Total assets | 992,512 | 1,101,935 |
| Cash and bank balances (3) | 104,788 | 129,975 |
| Unrestricted cash and cash equivalents | 46,004 | 48,102 |
| Net asset value per share (US$) (4) | $3.70 | $3.66 |
| Net asset value per share (GBP) (5) | £2.74 | £2.67 |
1. EBITDA is a non-GAAP financial measure used as an indicator of a company’s ability to incur and service debt. EBITDA has been calculated as the sum of profit before tax, finance expenses, depreciation and impairment and unrealised losses on aircraft purchase rights and deposits paid for aircraft. EBITDA presented herein may not be comparable to similarly titled measures presented by other companies.
2. Fleet assets are defined as property, plant and equipment plus assets held for sale plus finance lease receivables.
3. Cash and bank balances as at 31 December 2025 comprise cash and cash equivalents of US$46.0 million (30 June 2025: US$48.1 million), restricted cash balances of US$58.8 million (30 June 2025: US$80.8 million) and investment in fixed term deposits US$nil (30 June 2025: US$1.0 million).
4. Net asset value per share is total equity divided by the total number of shares in issue, excluding treasury shares.
5. Based on GBP:USD exchange rate as at 31 December 2025 of 1.35 (30 June 2025:1.37).
Aircraft Fleet
| Aircraft Type | 31 December 2025 | 30 June 2025 |
| Boeing 777-300ER | – | 1 |
| Airbus A330-300 | 1 | 1 |
| Airbus A321-200 | 6 | 6 |
| Airbus A320-200 | 3 | 3 |
| Airbus A220-300 | 5 | 5 |
| ATR 72-600 | 14 | 13 |
| ATR 72-500 | 4 | 4 |
| Total | 33 | 33 |
At 31 December 2025, Avation’s fleet comprised 33 aircraft, including three aircraft on finance lease. Avation currently serves 16 customers in 15 countries. The weighted average age of the fleet is 8.8 years (30 June 2025: 8.5 years) and the weighted average remaining lease term is 4.3 years (30 June 2025: 3.9 years).
Avation sold a Boeing 777-300ER widebody aircraft during the period generating a gain on sale of US$4.1 million. The Company also acquired a new ATR 72-600 turboprop aircraft in late December which has been placed on a 12-year fixed rate lease agreement with an airline in Korea. Avation’s fleet comprises 61% narrowbody, 31% turboprop and 8% widebody aircraft by book value as at 31 December 2025. Fleet assets have decreased 9.1% to US$744.8 million (30 June 2025: US$819.8 million) principally due to the Boeing 777-300ER sale noted above. During the six months ended 31 December 2025 all aircraft were on lease.
Avation has nine new ATR 72-600 aircraft on order for delivery between Q2 2026 and Q2 2028 and purchase rights for a further 24 aircraft as at 31 December 2025.
Debt summary
| US$ ‘000s | 31 December 2025 | 30 June2025 |
| Current loans and borrowings | 45,638 | 70,084 |
| Non-current loans and borrowings | 543,086 | 582,253 |
| Total loans and borrowings | 588,724 | 652,337 |
| Unrestricted cash and bank balances | 46,004 | 48,102 |
| Net indebtedness (1) | 542,720 | 604,235 |
| Net debt to total assets | 54.7% | 54.8% |
| Net debt to EBITDA | 5.1x | 5.6x |
| Weighted average cost of secured debt (2) | 5.1% | 5.2% |
| Weighted average cost of total debt (3) | 6.8% | 6.6% |
1. Net indebtedness is defined as loans and borrowings less unrestricted cash and bank balances.
2. Weighted average cost of secured debt is the weighted average interest rate for secured loans and borrowings at period end.
3. Weighted average cost of total debt is the weighted average interest rate for total loans and borrowings at period end.
Net indebtedness was reduced by 10.2% to US$542.7 million (30 June 2025: US$604.2 million).
The weighted average cost of total debt has increased to 6.8% at 31 December 2025 (30 June 2025: 6.6%) largely due to an increase in the Company’s unsecured debt coupon from 8.25% to 8.50% following the successful issue of US$300 million unsecured notes due May 2031 in November 2025. The weighted average cost of secured debt decreased to 5.1% at 31 December 2025 (30 June 2025: 5.2%).
At the end of the period, Avation’s net debt to total assets ratio improved slightly to 54.7% (30 June 2025: 54.8%). At 31 December 2025, 84.0% of total debt was at fixed or hedged interest rates (30 June 2025: 84.2%). The ratio of unsecured debt to total debt was 50.1% (30 June 2025: 45.3%).
Financial Analysis
Revenue
| US$ ‘000s | Six months ended 31 December, | |||
| 2025 | 2024 | |||
| Lease rental revenue | 44,108 | 44,558 | ||
| Less: amortisation of lease incentive assets | (1,540) | (1,628) | ||
| 42,568 | 42,930 | |||
| Interest income from finance leases | 420 | 780 | ||
| Maintenance reserves revenue | 10,299 | 9,270 | ||
| End of lease compensation | 2,260 | – | ||
| 55,547 | 52,980 | |||
Lease rental revenue decreased by 1.0% from US$44.6 million in the six months ended 31 December 2024 to US$44.1 million in the six months ended 31 December 2025. The decrease was principally due to the sale of a Boeing 777-300ER aircraft in August 2025 partially offset by an increase in the US dollar equivalent value of the Company’s Euro-denominated lease revenue. All of Avation’s aircraft were on-lease throughout the period.
Interest income from finance leases decreased by 46.2% from US$0.8 million in the six months ended 31 December 2024 to US$0.4 million in the six months ended 31 December 2025. The reduction was principally due to fewer aircraft on average leased on finance leases during the six months ended 31 December 2025. There were three aircraft leased on finance leases at 31 December 2025.
Other income
| US$ ‘000s | Six months ended 31 December, | |||
| 2025 | 2024 | |||
| Fees for late payment | 269 | 753 | ||
| Foreign currency exchange gain | – | 1,002 | ||
| Claim recovery | – | 442 | ||
| Others | 185 | 271 | ||
| 454 | 2,468 | |||
Fees charged for late payments reduced by 64.3% from US$0.8 million in the six months ended 31 December 2024 to US$0.3 million in the six months ended 31 December 2025. The reduction is due to reduced levels of arrears throughout the period.
Claim recoveries recognised in other income in the six months ended 31 December 2024 are distributions paid to creditors of Virgin Australia in excess of amounts allocated to trade receivables.
Foreign currency exchange gains in the six months ended 31 December 2024 arose principally from the revaluation of Euro-denominated loans during the period.
Administrative expenses
| US$ ‘000s | Six months ended 31 December, | |||
| 2025 | 2024 | |||
| Staff costs | 3,055 | 2,875 | ||
| Other administrative expenses | 2,551 | 1,725 | ||
| 5,606 | 4,600 | |||
Staff costs increased by 6.8% from US$2.9 million in the six months ended 31 December 2024 to US$3.1 million in the six months ended 31 December 2025 principally as a result of inflationary salary increments.
Other administrative expenses increased by 47.9% from US$1.7 million in the six months ended 31 December 2024 to US$2.6 million in the six months ended 31 December 2025. The increase in the six months ended 31 December 2025 was principally due to additional audit and accounting fees of US$0.4 million associated with the update of the Company’s GMTN programme documentation and US$0.2 million of fees paid to retained contractors for commercial marketing services.
Finance income
| US$ ‘000s | Six months ended 31 December, | |||
| 2025 | 2024 | |||
| Interest income | 2,116 | 2,752 | ||
| Fair value gain on financial derivatives | – | – | ||
| Finance income from discounting non-current deposits to fair value | 317 | 315 | ||
| Gain on early full repayment of borrowings | – | 1,084 | ||
| 2,433 | 4,151 | |||
Interest income was US$2.1 million in the six months ended 31 December 2025. Interest income includes distributions from investments in money-market funds. The group deploys surplus cash balances into fixed term deposits and money-market funds while maintaining sufficient liquidity to meet near-term payment obligations.
A gain of US$1.1 million on early full repayment of borrowings arose when in-the-money interest rate swaps were terminated concurrently with repayment of two loans on the sales of aircraft in August 2024.
Finance expenses
| US$ ‘000s | Six months ended 31 December, | |||
| 2025 | 2024 | |||
| Amortisation of IFRS 9 gain on debt modification | 4,188 | 7,440 | ||
| Interest expense on secured borrowings | 8,139 | 8,447 | ||
| Interest expense on unsecured notes | 12,477 | 13,677 | ||
| Amortisation of loan transaction costs | 575 | 699 | ||
| Amortisation of interest expense on non-current borrowings | 324 | 314 | ||
| Loss on repurchases and redemption of unsecured notes | 8,790 | – | ||
| Fair value loss on financial derivatives | 2,800 | 2,002 | ||
| Others | 79 | 157 | ||
| 33,184 | 25,296 | |||
Amortisation of IFRS 9 gain on debt modification of US$4.2 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.
Avation Capital S.A. 8.25%/9.0% unsecured notes were fully redeemed in November 2025. The Company has recognised a loss of US$8.8 million on the redemption of these notes to write off the difference between the accreted value of the notes and the amount paid on redemption.
Interest expense on secured borrowings reduced by 3.6% to US$8.1 million in the six months ended 31 December 2025 from US$8.4 million in the six months ended 31 December 2024 as a result of repayments of secured loans. Secured loans have been reduced by US$34.9 million from US$328.7 million at 31 December 2024 to US$293.8 million at 31 December 2025.
Interest expense on unsecured notes reduced by 8.8% from US$13.7 million in the six months ended 31 December 2024 to $12.5 million in the six months ended 31 December 2025. The reduction principally results from repurchases of notes which reduced the average outstanding principal amount.
A non-cash mark-to-market loss of US$2.8 million arose on the revaluation of interest rate swap agreements as a result of changes in floating interest rates in the six months ended 31 December 2025.
Results Conference Call
Avation’s senior management team will host an investor update call on 26 February 2026, at 12:00 PM GMT (UK) / 7:00 AM EST (US) / 8:00 PM SGT (Singapore), to discuss the Company’s financial results.
A replay of the investor update call will be made available on the Investor Relations page of the Avation PLC website.
Basis of presentation
This announcement covers the unaudited results of Avation PLC for the six months ended 31 December 2025.
Financial information presented in this announcement is being published for the purposes of providing preliminary Group financial results for the six months ended 31 December 2025. The financial information in this preliminary announcement is not audited and does not constitute statutory financial statements of Avation PLC within the meaning of section 434 of the Companies Act 2006. The Board of Directors approved this financial information on 25 February 2026. Avation PLC’s most recent statutory financial statements for the purposes of Chapter 7 of Part 15 of the Companies Act 2006 for the year ended 30 June 2025, upon which the auditors have given an unqualified audit, were published on 1 October 2025 and have been annexed to the annual return and delivered to the Registrar of Companies.
All “US$” amounts in this release are US Dollar amounts unless stated otherwise. Certain comparative amounts have been reclassified to conform with current year presentation.
