US lessor Aircastle has agreed to sell 21 narrowbody aircraft when they come off lease.
This follows a weak third quarter that saw Aircastle’s revenues decrease to $192 million, from $237 million a year ago.
Aircastle’s quarterly net profit was $5.8 million, down $43 million the previous year.
The lessor’s adjusted third-quarter EBITDA was $181 million, down from $222 million.
Its collection rate during the quarter ended 30 September represented approximately 73% of lease rental and direct financing and sales-type lease revenues.
As of 30 October, Aircastle had total liquidity of $2.1 billion, including $1.25 billion of undrawn credit facilities, unrestricted cash of $432 million, $120 million of contracted asset sales, and $340 million of projected operating cash flows through 30 October 2021.
The Connecticut-based lessor closed the quarter with 226 unencumbered aircraft, the same as a year ago, with a net book value of $5.5 billion.
The number of lessees decreased to 81 from 87 previously.
Aircastle has $771 million of total adjusted contractual commitments through 30 October 2021, including $500 million of notes due in March 2021.
Over the first nine months of 2020, Aircastle booked $362 million in aircraft impairment charges, including $19.5 million in the quarter ended 30 September.
In the third quarter Aircastle issued $650 million of 5.25% senior unsecured notes due in 2025.
Moody's has affirmed Aircastle's senior unsecured debt rating at Baa3.
“While it is impossible to predict the timing of recovery, we are confident passengers will return, and we are confident about the increasingly important role operating leasing will play in facilitating the industry's recovery,” said Aircastle chief executive Mike Inglese.
“Aircastle's fleet of predominantly mid-age, single-aisle, fuel efficient aircraft represents a strong value proposition for capital constrained, sensibly managed airlines around the globe. Our management team is deep and experienced, and we enjoy the strong shareholder support of Marubeni Corporation and Mizuho Leasing,” Inglese added.
Aircastle noted that about 50% of its customers asked for rental deferrals during the third quarter.
“Through mid-October, 43 airlines across the globe have either entered bankruptcy proceedings or completely ceased or suspended operations. We are confident that the major US and global carriers, as well as the largest low-cost carriers, have the means to survive the crisis. We also anticipate that there will be further airline bankruptcies and liquidations in the winter,” the lessor predicted.
“We continue to grant deferrals to help certain clients manage through the crisis. As of 30 October, we had executed documents or had approved deferral arrangements with 40 lessees representing approximately 50% of our customer base. The amount deferred currently approximates $101 million, including $80 million that appear in our 30 September consolidated balance sheet,” Aircastle disclosed, noting that this represented approximately 14% of its reported lease rental and direct financing and sales-type lease revenues for the trailing twelve months ended 30 September.
On 3 November, Airfinance Journal reported that Aircastle had closed a sale and leaseback transaction with Volaris covering two new Airbus A320neo deliveries.