Dubai Aerospace Enterprise, the Middle East's biggest plane lessor, said its aircraft leasing division signed 200 lease agreements, extensions and amendments in 2021, as the aviation industry began to gradually recover from the Covid-19 pandemic.
DAE Capital, the company's aircraft leasing division, also acquired 41 aircraft and sold 30 aircraft during the year, DAE said in its annual business transactions update on Wednesday. In addition, it signed four new servicing agreements covering seven aircraft.
The company's fleet of owned, managed, committed and mandated-to-manage aircraft reached about 425 planes during 2021, when it served 112 customers in 54 countries, it said. The average age of its owned fleet reached 6.7 years, it said.
While the pandemic’s effects on the aviation industry will continue for a long time, the recovery is under way and aircraft lessors are well placed to prosper even in this "dislocated environment", according a report by KPMG in December.
“While the challenges stemming from new variants of concern are significant, there have been clear positive trends with the introduction of the EU vaccine passport and the reopening of transatlantic travel. The question is when, not if, we will see a full recovery," said Joe O’Mara, head of aviation finance and tax partner at KPMG.
DAE issued $2.5 billion in new unsecured notes during the course of 2021, with a weighted average coupon of 2.31 per cent. It also redeemed about $2.2bn in total unsecured notes with a weighted average coupon of 5.07 per cent last year, the company said.
P:rofit for the period fell to $90.5 million in the first nine months of 2021, from $167.3m in the same period in 2020, DAE said in November. Adjusted profit for the period stood at $128.8m after adding back one-off debt redemption costs.
Total revenue for the first nine months dropped to $925.3m, from $984.1m in the same period in 2020, as net lease revenue fell 8.7 per cent year-on-year.
The company is well positioned to manage the effects of Covid-19 thanks to its strong balance sheet, it said.
The aviation industry has benefited from a robust sale-and-leaseback market during the year, according to KPMG.
“Since the outset of the pandemic, we have seen airlines enter into billions of dollars’ worth of sale and leaseback transactions with lessors. Some of these transactions were airlines seeking liquidity by selling their existing owned aircraft to lessors and leasing them back from the lessor," said Killian Croke, who leads KPMG’s aviation audit team.
"More frequently, lessors were stepping in to fulfil orders that airlines had placed with Boeing or Airbus and entered into a lease of that new aircraft with that same airline. This sale and leaseback market has continued to prosper over the course of 2021," he said.