Avolon eyes opportunities in Iran

Iran is set to create a boom for aircraft lessors as the country needs hundreds of modern aircraft that western manufacturers will not be able to meet due to a years-long order backlog, the head of Irish lessor Avolon said yesterday.

Avolon — which yesterday reported a 74% annualised rise in first half net income to $105m (€96.3m) — said the country could catch up with neighbouring Turkey, which has a similar population and a fleet of 500 planes.

“Iran, I think, will be a boom, a real opportunity for the lessors in the next couple of years,” Avolon’s chief executive, Domhnal Slattery said yesterday.

Mr Slattery declined to comment on two rival bids for the company, news of which materialised last weekend, that value it at $30 and $31 per share respectively.

Avolon— which has seen its share price rise 50% since its December IPO and is valued at around $2.4bn— owns and manages over 150 aircraft.

Net income for the second quarter of this year alone jumped 133% year-on-year to just under $56m.

The company has $1.4bn of delivery commitments for 2016.

Avolon, the world’s eleventh largest aircraft lessor, expects interest rates to rise, with a possible move from the US Federal Reserve in September.

However Mr Slattery said the company was “very well protected” against higher rates due to careful matching of liabilities and fixed-rate funding.

Rising interest rates will also likely drive inflation, which he said would provide an “extremely positive backdrop for aircraft leasing.”

Reuters