Irish lessor Avolon, which has ten leased jets still trapped in Russia, has recorded a first-quarter US$304 million impairment to cover the full financial impact.
“While we continue to make every effort to recover these assets, we are recognising the full impairment this quarter, putting the financial impact of Russian sanctions firmly behind us,” Avolon’s Chief Executive Dómhnal Slattery said in a statement.
The EU sanctions came into effect on March 28, as a consequence of Russia’s attack on Ukraine, after which all aircraft lease contracts with Russian carriers had to be cancelled. Consequently, over 400 leased aircraft, worth approximately U$10 billion, are currently trapped in Russia.
Overall, Avolon posted a net loss of US$182 million for the first quarter of 2022, and an adjusted net income of US$80 million excluding the impact of Russian sanctions. This means that Avolon had it strongest quarter since the outbreak of the COVID-19 pandemic and Slattery put the improvement down to the reopening of borders in Asia and increased trends in global flights, producing higher cash collection rates. At the end of March Avolon either owned or managed 592 aircraft.
“This performance re-affirms the inherent strengths of our business and the absolute resilience of the aircraft leasing model, providing us with confidence in the outlook for the remainder of the year,” Slattery added. (£1.00 = US$1.25 at time of publication).