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The aircraft leasing company Avolon amid the Corona crisis

Johanna Koyser
06.05.2020

Aircraft leasing company sounds very complicated at first. However, there is a rather uncomplicated concept behind it. For many years it has been common practice for airlines to lease aircraft instead of buying them. One representative of this business sector is Avolon. Founded in Ireland in 2010, the Avolon fleet currently consists of 855 aircraft. These are leased to over 150 customers, i.e. 150 different airlines worldwide. But as WingMag has been reporting for over two months now, the international aviation world has been hit hard by the coronavirus. It is now known how the crisis is affecting Avolon.

According to current information, 80 percent of leasing customers have requested Avolon to defer their payments. This is a measure with which the airlines are trying to reduce current fixed costs. As Avolon reports, an agreement has been in place with some airlines since March 31, allowing on average a deferral of payments for three months. However, the company also stresses that not all requests ask for a deferral of the complete leasing instalments. Many airlines would like to continue to pay their bills, albeit at a reduced rate. It’s almost surprising that Avolon, at least externally, is quite relaxed. After all, the 80 percent mentioned above account for a full 90 percent of the total leasing income.

Avolon reacted as soon as the first signs of the extent of the corona crisis in aviation became apparent. An order for 75 Boeing 737 MAX was cancelled. This enabled the company to save money quickly, as there is currently no demand for new aircraft from its customers. Thus, the leasing company was able to position itself quite well during the crisis. Nevertheless, one thing is very clear here: somewhere the problems get stuck. In this case, it is the aircraft manufacturer Boeing, which is ultimately stumbling in the wake of the airlines’ payment deferrals at Avolon.

Picture © Dominik Scythe

by Johanna Koyser

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