Avation Plc (LON:AVAP) is the topic of conversation when Charlie Cullen, Analyst at WH Ireland caught up with DirectorsTalk to discuss the latest company news.
Avation has announced that it has entered into a new four-year operating lease for one of its two Airbus A320 aircraft to Philippines low cost carrier Cebu Pacific, what should investors take from this?
With this Airbus A320 due to come off lease later this year, it is encouraging to see Avation has successfully transitioned the aircraft to a quality lessee in a timely manner ensuring minimal time off-lease, which is testament to both an improving aircraft market and Avation’s ability to manage its fleet.
Have you had to change your forecasts based on this news?
Our forecasts remain unchanged following today’s news.
How do you see the outlook for the company?
We believe the business is positioned very well following the placement earlier this year of the remaining aircraft which were repossessed during the pandemic, with improving market dynamics providing a further tailwind. This should see underlying profitability improve as the costs of service, transition, and debt on off-lease aircraft are matched by the associated revenues.
What catalysts would you hope to see over the coming months?
Ahead of Avation’s full year results expected on 28th September, we would expect to see an improvement in profitability evidence the progress made over the last year. Beyond this, the delivery of two new ATR 72-600 aircraft in April and May 2024 and their subsequent placement should provide a further signal to improving market dynamics and prospects for Avation.
Avation PLC (LON:AVAP) is a commercial passenger aircraft leasing company owning a fleet of aircraft which it leases to airlines across the world. Avation’s future focus are new technology low CO2 emission aircraft. Its current customers include easyJet, Eva Air, Philippine Airlines, Alliance Air India, Vietjet Air, Fiji Airways, Mandarin Airlines, Cebu Pacific, airBaltic and Danish Air Transport.
