Irish company Avalon said on Tuesday that it had reduced the book value of the planes to zero, after recovering only four planes so far, writes Reuters
The company has also taken an optimistic outlook on the outlook for the industry, as air travel has largely resumed following a series of Covid-19 blockades.
“While we continue to make every effort to recover these assets, we acknowledge the total depreciation this quarter, leaving behind the financial impact of Russian sanctions,” the company’s general manager, Dómhnal Slattery, said in a statement.
More than $ 100 billion worth of leased planes remain in Russia after the March 28 deadline for cancellation of contracts, in line with Western sanctions imposed due to the war in Ukraine, leaving landlords facing potential depreciation heavy or with a long insurance battle.
Avolon reported a net loss of $ 182 million for the quarter, but said adjusted net income of $ 80 million, excluding Russia’s impact, was the strongest quarterly performance since the onset of the Covid-19 pandemic.
Slattery said the improved performance was largely due to the rapid reopening of Asia’s borders and the growing number of flights globally, leading to higher cash collection rates.
Avolon owned and operated a fleet of 592 aircraft at the end of March.
“This performance reaffirms the inherent strengths of our business and the absolute resilience of the aircraft leasing model, giving us confidence in the outlook for the rest of the year,” he said.
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