FLY extends leases with Virgin Atlantic

Eleanor Steed
By Eleanor Steed September 8, 2017 14:27

FLY extends leases with Virgin Atlantic

In a presentation to investors, FLY confirmed that it had extended its two A340 leases with Virgin Atlantic from 2018 to 2019. In Gary Liebowitz’s report from the meeting, the Wells Fargo analyst says that this has reduced the required depreciation and turned these aircraft into positive earnings contributors, which has been factored into FLY’s third quarter guidance.

Liebowitz’s report also notes that FLY’s exposure to Air Berlin – one A321 and one A330-200 – will likely “snap FLY’s streak of five quarters of 100% fleet utilization”.

In its presentation to investors, FLY confirmed that it had repurchased 3.3 million shares for $43.4 million in 2017 as of August 30, 2017, with 10% of FLY’s shares repurchased in 2017. The average price per share was $13.25 in 2017.

FLY is also reported to be considering calling its 6.75% 2020 bonds upon the December 15 call date and replacing with a medium-term issue with a low/mid-5% coupon, according to Liebowitz, who adds that FLY is also considering refinancing its youngest planes into a less-costly longer-term facility.

Eleanor Steed
By Eleanor Steed September 8, 2017 14:27