Major plane lessor Avolon and its peers stand to benefit from the coronavirus epidemic as airways shore up cash by refinancing their aircraft, the Dublin-stationed agency said Wednesday.
A sale-and-leaseback pattern among airlines “will unquestionably be accentuated now with the coronavirus”, CEO Domhnal Slattery said after Avolon posted $718 million in net earnings for last year.
Privately-held Avolon, the world’s third-biggest lessor of commercial jets, is 70%-controlled by a unit of Chinese conglomerate Hainan Group.
Plane refinancing tends to pick up when airways are buffeted by world crises such as the 1990-1 Gulf War, the September 11 terror assaults a decade later, or the 2003 SARS virus pandemic.
“If we look at the past as a guide, it sometimes has allowed us to exceed,” Slattery stated, adding that sale-and-leaseback interest had already risen on trade strains and economic uncertainty and would get an additional boost from the novel Coronavirus.
Slattery acknowledged a refinancing surge would also benefit competitors – which embrace listed companies Aercap and Air Lease- however, stated Avolon’s money resources and 2.2 debt-to-equity ratios made it significantly well placed.