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Fly Leasing plans $750 million investment in new aircraft
Fly Leasing plans $750 million investment in new aircraft
Fly Leasing plans $750 million investment in new aircraft
Mar 17, 2017 - Global aircraft leasing firm Fly Leasing plans to invest $750 million in new aircraft this year as part of an ongoing renewal programme.

The company made the announcement as it revealed its annual results for 2016, which showed a net loss of $29.1 million and adjusted net income of $79.3 million.

The annual net loss followed a fourth quarter net loss of $63.8 million as a result of a $92 million non-cash impairment charge taken on three older aircraft.

The company wrote down two 2006 Airbus A340-600s and one 2001 Airbus A330-200 to their current market values.

The aircraft are the company’s oldest wide-body aircraft and the only aircraft of their type in its portfolio.

Fly Leasing has been reducing the age of its fleet and at the end of 2016 its average age, weighted by the net book value of each aircraft, was 6.2 years. The average remaining lease term, also weighted by net book value, was 6.8 years.

The portfolio of 76 aircraft, which generates annual rents of approximately $325 million, is on lease to 42 lessees in 27 countries. It is managed and serviced by BBAM, one of the world’s largest aircraft lease managers.

Colm Barrington, CEO of Fly Leasing, which is based in Dublin, Ireland, said: “In 2016, we continued to transform Fly’s fleet, which is now the youngest in the company’s history and among the youngest in the industry.

“We sold 27 aircraft during the year – primarily mid-life models – at a premium to book value. We invested in newer equipment, acquiring 10 aircraft during the year. In addition, we continued to repurchase shares, buying back a total of 3.4 million shares or approximately 10% of outstanding shares at the beginning of the year.

“We entered 2017 with ample liquidity that provides us with the opportunity to grow our portfolio and to continue our share buyback program.

“We set a target of acquiring $750 million of new aircraft in 2017 and have the financial firepower to exceed this level if we find the right opportunities to enhance our portfolio and shareholder value.”

Barrington said he was encouraged by the "resilience" of global air traffic and the continued profitability of the sector.

He added: “There is a continuing strong market for leased aircraft, evidenced by the fact that our fleet is fully utilized and that we have no aircraft available for lease until the end of the year.”

At the end of December last year, Fly Leasing's total assets were $3.4 billion, including $2.8 billion of investment in flight equipment. Total cash was $612.1 million.

Source: AssetFinance International
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