HK Express funds delivery of first A321neo
31st March 2023
Avation has narrowed pre-tax losses in the six months ending December 31, 2025, to $5.7 million, compared with $9.8 million pre-tax losses a year prior.
Loss after tax totalled $4.9 million, down from $868 million profit after tax a year prior.
Revenue totalled $55.5 million, up from $52.98 million. Other income totalled $454,000, down from $2.5 million.
The company said in its earnings report that it was recently notified of a technical failure of one of its Airbus A220-300 aircraft on lease to airBaltic. The aircraft was classed as “unrepairable” and deemed a total loss for the company.
During its earnings call, the Avation team said the aircraft had a technical fault in an ozone converter and the hull was damaged.
Avation will receive $33.4 million in an insurance claim settlement as compensation for the loss of the aircraft and is expected to be paid “shortly”.
“We get paid the full book value of the plane,” management said in the call. “The lease ends and we don't have an obligation to resupply. It just means airBaltic has one less aircraft and we have our book value in cash — so it's a neutral outcome.”
In November, the company issued $300 million 8.5% unsecured notes due May 2031, which represent just over 50% of the company's total debt. The notes refinanced its previous notes issuance that was due to mature this October.
“The extended maturity for the new notes creates stability in our capital structure and provides a platform for future fleet growth,” said Avation executive chairman Jeff Chatfield.
The company said the refinancing, along with its contracted lease portfolio, provide visibility of cash flows and extended debt maturities.
Avation's fleet remains at 33 aircraft, following the sale of a Boeing 777-300ER in August and delivery of a new ATR 72-600 aircraft aircraft in December 2025. The company expects a further nine ATR 72-600 deliveries. These are scheduled for delivery between the second quarter of this year and the second quarter of 2028 — the first expected in April 2026.
The April delivery will be placed on lease to Cambodia Airways for 12 years. A second delivery has been scheduled for later this year and has also been placed on a 12-year lease to Cambodia Airways.
As of the end of 2025, the company had 10 unencumbered aircraft. Net debt was reduced to $542.7 million at the end of December, down by $61.5 million from June 2025.
Net debt to EBITDA improved to 5.1x.