Aircraft lessor Avolon expects to defer rent payments from most of its airline customers as the Covid-19 crisis continues to ground most passenger fleets.
Irish-based Avolon buys aircraft and leases them to airlines around the world. The company’s profits fell 13 per cent in the first three months of the year to $154 million (€143 million) from $176 million in the opening quarter of 2019.
Avolon confirmed on Wednesday that since March 31st it has agreed to defer rent payments due from airlines for an average of three months.
“It is expected that some form of short-term rental deferral arrangement will be agreed with a majority of our customers,” the company added.
“Given the ongoing impact on our customers’ operations we anticipate that additional requests for rent relief will be received and that a number of lessees will fall behind on their rental obligations with a related increase in Avolon’s trade receivable balance.”
So far airlines that account for 90 per cent of the rent Avolon receives have asked for some form of payment relief.
Avolon confirmed last month that it has postponed the delivery of some aircraft.
Dómhnal Slattery, Avolon’s chief executive, warned that the Covid-19 pandemic would “materially reshape” the commercial aviation industry for the foreseeable future.
“Uncertainty remains as to the length of this crisis and we expect that it will likely be some time before air traffic returns to more normalised levels,” he said.
Mr Slattery added that Avolon was confident that aviation would recover and in the company’s ability to deal with the crisis.
