Aircraft leasing firm Avolon says it has cancelled or deferred commitments for more than 100 aircraft - chiefly of the troubled Boeing Max - to cope with the widespread grounding of air traffic.
Dublin-based Avolon said it is in strong position to weather the current falloff in leasing activity, citing a cash pile and undrawn facilities topping $5bn (€4.5bn).
Chief executive Dómhnal Slattery said his firm has “acted swiftly and decisively” to prune its order book “to better align with market conditions”.
Mr Slattery said Avolon has cancelled its commitments for 75 unplaced Max aircraft. The move was confirmed as part of a quarterly trading update today.
He said Avolon remains committed eventually to leasing more units of the troubled Boeing 737 Max.
The Max has been grounded globally since March 2019 following two deadly crashes linked to its avionics design.
Avolon received nine Max aircraft before the grounding order and last month said it expects to receive another 24 this year. Today’s update said 16 Max aircraft originally scheduled for delivery by 2023 now would arrive in 2024 or later.
Avolon also is cancelling commitments for four A330neo Airbus aircraft “and deferred delivery dates for an additional 25 narrow-body aircraft to 2024 and beyond”, Mr Slattery said.
This includes shifting the planned acquisition of nine A320neo aircraft next year to a new target of 2027.
The net impact of Avolon’s cancelled and deferred orders means it remains committed to acquiring 165 aircraft by 2023, down from previous plans for up to 284.
“We are currently facing the most challenging period in the history of commercial aviation. The global fleet has been effectively grounded as countries work hard to slow the spread of Covid-19,” Mr Slattery said.
“While we have never seen a crisis of this nature, we remain confident that the industry will recover once the impact of Covid-19 recedes.”
Last month Avolon, the world’s third-largest aircraft lessor by fleet size, reported record profits of $717m (€657m) for 2019 on lease revenue of $2.61bn.
Avolon also confirmed at that time it was negotiating with Boeing on possible compensation for the delayed delivery of Boeing Max aircraft already booked with customers.