Irish-based aircraft leasing company, Avolon, and its peers stand to benefit from the coronavirus outbreak, as airlines shore up cash by refinancing their planes, the company has said.
A sale-and-leaseback trend among airlines “will unquestionably be accentuated now, with the coronavirus,” Avolon’s chief executive, Domhnal Slattery, said after the company posted $718m (€658m) in net income for 2019.
“The phone hasn’t stopped ringing,” Mr Slattery said.
Privately-held Avolon, the world’s third-biggest lessor of commercial jets, is 70% owned by a subsidiary of Chinese conglomerate Hainan Group.
Plane refinancing tends to pick up when airlines are buffeted by global crises, such as the 1990-1 Gulf War, the September 11 terror attacks of 2001, or the 2003 SARS virus epidemic.
“If we look at the past as a guide, it typically has allowed us to outperform,” Mr Slattery said, adding that sale-and-leaseback interest had already risen on trade tensions and economic uncertainty, and would get a further boost from the virus.
“We never set out to exploit, or anything like that, in a scenario like this, but, obviously, the risk profile is changed as a consequence of [the virus], so they tend to be strong transactions from our perspective,” he said.
Mr Slattery acknowledged that a refinancing surge would also benefit rivals — which include listed firms, Aercap and Air Lease Corporation — but said Avolon’s cash resources and 2.2 debt-to-equity ratio made it particularly well-placed.