Avolon start-up costs contribute to €24.3m loss

START-UP costs totalling $15.3 million (€10.64m) for aviation financier Domhnall Slattery’s Avolon Aerospace Leasing group contributed to the group recording a loss of $35m (€24.3m) in its first year, new figures show.

Since its launch in May 2010, the Dublin-based aircraft leasing firm has raised $3 billion (€2.08bn) in capital and a spokesman for the company said yesterday that “the business is performing ahead of expectations. It is going from strength to strength”.

Accounts filed with the Companies’ Office show Avolon Aerospace Leasing Ltd and subsidiaries recorded revenues of $13.7m to the end of December last.

The company is backed by private equity groups CVC, Cinven and Oak Hill Capital and the spokesman said that the firm has currently 80 aircraft committed to 20 airlines.

The firm poached seven senior staff from RBS Aviation to launch and the accounts disclose that the $15.3 million cost incurred by Avolon is associated with “the formation of the company and the settlement of arrangements in connection therewith”.

At its launch, the company had secured $750m in equity commitments from its shareholders, with a management team boasting an aggregate 200 years’ experience.

According to a note attached to the accounts, the directors state that they “intend to maintain the success and growth of the company going forward, and continue to evaluate new investment opportunities.

“The company ended the period with $78m in cash on hand, and undrawn debt commitments of $704m and undrawn equity capital commitments of $338m.”

The number of staff employed at the end of December last was 21 and $7.47m was paid under “compensation and benefit expenses” under the heading of “general and administrative expenses”.

Along with general and administrative expenses totalling $28.7m and finance expenses totalling $21.8m, the company recorded a pre-tax loss of $39.5m.

The company received a tax credit of $4.3m resulting an after-tax loss of $35.1m. The loss takes into account a depreciation charge of $4.9m.

The general and administrative expenses included legal and professional fees topping $15.8m, while it incurred $1.13m in travel expenses, $1.2m in office expenses and $3m in other expenses.

The spokesman said the firm employs 31, with the majority employed in Dublin and others employed at offices in New York, Shanghai and Hong Kong.

The firm’s total equity at the end of last year was $144.9m.

The accounts show that the company’s business is part financed by 12 banks located in Ireland, the US, Britain, France and Germany.