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Avolon

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Avolon Aerospace
IndustryAircraft leasing
Founded2010; 14 years ago (2010)
Headquarters
Dublin
,
Ireland
Owner70% Bohai Leasing
30% Orix Corporation
Websitewww.avolon.aero

Avolon is an aircraft leasing company headquartered in Dublin, Ireland.[1] It was established in May 2010 by Dómhnal Slattery[2] and a team from RBS Aviation Capital, including John Higgins, Tom Ashe, Andy Cronin, Simon Hanson, and Ed Riley.[3][4] In December 2014, Avolon went public on the New York Stock Exchange (NYSE) with the ticker symbol AVOL, marking the largest listing of an Irish-founded company on the NYSE.[5] In September 2015, Avolon received a cash offer from Bohai Leasing Co., an affiliated Chinese leasing and financial services company, to acquire 100% of Avolon's common shares.[6] The acquisition by Bohai Leasing was completed in January 2016, leading to Avolon's delisting from the NYSE. In November 2018, ORIX Corporation, a Japanese financial institution, acquired a 30% stake in Avolon from its shareholder, Bohai Capital,[7] which is part of the HNA Group.

In June 2021, Avolon made headlines by placing the world's largest order for eVTOL aircraft, specifically ordering 500 VX4s from Vertical Aerospace.[8]

In October 2022, Dómhnal Slattery, the founding CEO of Avolon, retired, and Andy Cronin, the founding CFO, succeeded him in the position.[9]

Timeline

[edit]
  • Avolon, established in May 2010, received the 'Equity Deal of the Year' award from Airfinance Journal in 2011.[10]
  • In January 2013, Avolon announced a joint-venture aircraft leasing business with Wells Fargo.[11][12]
  • In July 2013, Avolon Capital Partners (ACP), the joint venture between Avolon and Wells Fargo, received regulatory approvals and was officially launched. ACP received its first aircraft, a Boeing 737-800 NG leased to Ryanair, in August 2013.[13]
  • In July 2013, Avolon welcomed changes to Irish legislation that allowed for the adoption of a new insolvency regime related to aircraft financing, equivalent to the Cape Town Convention's Alternative A regime.[13]
  • In September 2013, Avolon announced the pricing and issuance of US$636 million in fixed-rate asset-backed notes by Emerald Aviation Finance. The proceeds from this were used by Emerald Aviation Finance to acquire a fleet of 20 aircraft from Avolon, which in turn used the net proceeds to refinance existing debt.[14]
  • In October 2013, Avolon successfully closed and funded a US$636 million asset-backed securitization through Emerald Aviation Finance to acquire 20 aircraft from Avolon. This facilitated the refinancing of existing debt and extended Avolon's debt maturity profile. All 20 aircraft modifications were completed within 60 days of closing.[15]
  • In November 2013, Avolon published a detailed analysis on the financing requirements for new aircraft deliveries in the airline industry over the next decade, titled "Funding the Future: Matching the Demand for Aircraft with the Supply of Capital."[16]
  • In November 2013, Avolon commissioned a documentary titled "Pioneers and Aviators: A Century of Irish Aviation," exploring the history of Irish aviation.[17]
  • In December 2014, Avolon listed on the New York Stock Exchange under the ticker symbol AVOL, marking the largest-ever listing of an Irish-founded company on the NYSE.[5]
  • In March 2015, Avolon published an updated analysis on the key factors influencing the economic life of commercial jet aircraft, building on their previous analysis issued in September 2012.[18]
  • In September 2015, Avolon announced that Bohai Leasing Co., a Chinese leasing and financial services company affiliated with HNA Group, made a cash offer to acquire 100% of Avolon's common shares at a price of US$31 per share.[6]
  • In January 2016, Avolon announced the completion of its acquisition by Bohai Leasing, leading to the delisting of the company's stock from the New York Stock Exchange on January 8, 2016. Avolon also assumed control of Hong Kong Aviation Capital, which was also owned by Bohai.[19]
  • In July 2016, Avolon announced its acquisition of 45 aircraft from another lessor, marking the company's largest portfolio acquisition to date.[20]
  • In April 2017, Avolon completed the acquisition of the CIT Group aircraft leasing business, creating the world's third-largest aircraft leasing company. The combined fleet totaled 850 aircraft, with a value exceeding $43 billion as of March 31, 2017.[6]
  • In May 2017, Avolon delivered the world's first Boeing 737 MAX 8 aircraft to Malindo Air.[21]
  • In June 2017, Avolon announced a Memorandum of Understanding (MoU) with Boeing for 75 737 MAX 8 aircraft, along with 50 options, expanding Avolon's total fleet to over 900 aircraft.[22]
  • In September 2018, Avolon's new global headquarters at Number One Ballsbridge, Dublin, were opened by Ireland's Taoiseach (Prime Minister), Leo Varadkar.[23]
  • In November 2018, ORIX Corporation acquired a 30% stake in Avolon from its shareholder, Bohai Capital.[7]
  • In November 2018, Avolon delivered the world's first Airbus A330neo to Tap Airlines.[24]
  • In December 2018, Avolon placed its largest-ever aircraft order, comprising 100 Airbus A320neo family aircraft valued at US$11.5 billion.[25]
  • In April 2019, Avolon raised an additional US$2.5 billion in unsecured debt, leading to an investment-grade credit rating from Fitch, Moody's, and S&P Global.[26]
  • In June 2019, Avolon announced an order for 140 LEAP-1A engines from CFM International, with a value of US$2 billion at list prices. These engines would power 70 Airbus A320neo family aircraft from Avolon's order book.[27]
  • In June 2021, Avolon made headlines with the world's largest order for eVTOL aircraft, ordering 500 VX4s from Vertical Aerospace.[28]
  • In October 2021, Avolon announced a partnership with Israel Aerospace Industries (IAI) to become a significant player in the global air cargo market.[29]
  • In July 2022, Avolon's founding CEO, Dómhnal Slattery, retired, and Andy Cronin, the founding CFO, succeeded him in the role. Andy Cronin assumed the position of CEO in October 2022.[30]
  • As of September 30, 2023, Avolon had an owned, managed, and committed fleet of 897 aircraft.[31]

eVTOL order

[edit]

In June 2021, Avolon made an investment in the eVTOL company Vertical Aerospace. Vertical Aerospace announced its intention to list on the Stock Exchange through a SPAC transaction,[32] and they received orders for 1,000 eVTOLs from various companies, including American Airlines, Virgin Atlantic, and Avolon. Avolon placed the single largest order for eVTOLs globally, consisting of 500 Vertical VX4 aircraft. As of March 2022, Avolon had successfully allocated its order to airlines.[33]

Avolon has formed partnerships with GOL in Brazil, JAL in Japan, Gozen Holding in Turkey, Air Asia in Malaysia, and Air Greenland to establish eVTOL ride-sharing businesses utilizing the Vertical VX4 aircraft.[34]

Aircraft leasing in Ireland

[edit]

As of 2013, Ireland had established itself as a prominent jurisdiction for aircraft finance and leasing, according to law firm Dillon Eustace. The origins of the Irish industry can be traced back to the establishment of Guinness Peat Aviation in Shannon, County Clare, in 1975. A survey conducted by the Federation of Aerospace Enterprises in Ireland estimated that aviation leasing companies in Ireland managed assets valued at approximately €82.9 billion in 2013.[35]

The financing of aircraft requires a substantial amount of capital, with an estimated annual need exceeding US$100 billion to cover all aircraft deliveries. Aircraft leasing has gained prominence and now accounts for about 40% of the global aircraft financing market. This growth is attributed to airlines recognizing the advantages of leasing, which offers greater flexibility in managing their aircraft fleets. Some lessors anticipated that the proportion of leased aircraft in the global fleet would increase to as much as 50% in the years following 2012.[36]

Publications

[edit]

In April 2019, Avolon released a white paper titled "Project I: Positioning Ireland at the Forefront of Global Startup Innovation." The paper assessed Ireland's start-up ecosystem in comparison to global best practices and offered recommendations to enhance Ireland's global standing and support entrepreneurs.[37]

In July 2018, Avolon published a white paper titled "India, a 21st Century Powerhouse." The paper provided a comprehensive analysis of India's air travel market, covering factors impacting the commercial airline sector and an in-depth breakdown of passenger markets, airline fleets, and future growth projections. The paper projected that India's passenger fleet would nearly double to around 1,100 aircraft by 2027, with a total value of delivered aircraft estimated at $60 billion over the next decade at current list prices. The analysis also highlighted a shortfall of 300 aircraft in India's commercial aviation order book to meet the anticipated growth in demand. The demand was driven primarily by forecasted annual growth rates of 9.6% for domestic passenger demand and 8.3% for international passenger demand.[38]

In the first half of 2017, Avolon published a white paper series titled "The Land of Silk and Money," focusing on the Chinese aviation market. The series analyzed the development, growth, and maturation of China's domestic airline industry, as well as the inbound and outbound travel markets. The analysis indicated that Chinese airlines would require an additional 3,200 aircraft by 2026 to meet future fleet requirements. At the time, more than 50% of these aircraft remained to be ordered, including 1,150 narrow-bodied aircraft, 400 wide-bodied aircraft, and 150 regional jets.[39]

In September 2012, Avolon released an analysis of commercial aircraft's economic lives and retirement patterns. The analysis aimed to evaluate the validity of current assumptions regarding the economic life of commercial jets, which are typically depreciated over a useful life of approximately 25 years. This analysis was particularly relevant as a significant number of aircraft, around 8,000, were expected to be retired over the next decade, surpassing the total number of retirements since the inception of commercial aviation in the 1960s.[40] The Avolon analysis examined changes in retirement trends over time, differences in retirement behavior among specific aircraft types, and the potential impact on retirement trends and aircraft economic values due to the retirement of newer fleets, including the Airbus A320 and Boeing 737NG aircraft.[18]

In February 2013, Avolon published an analysis and investor guide on the anticipated market impact of the transition to new-generation Airbus (320Neo) and Boeing (737MAX) single-aisle aircraft families. The analysis explored how the transition from previous-generation A320ceo and 737NG aircraft to A320Neo and 737MAX models would influence the single-aisle aircraft market in the coming years.[13] The study indicated that the value impact on predecessor models would be limited due to the substantial number of current-generation aircraft in use and the high proportion of the global fleet approaching retirement. The authors predicted that rising passenger numbers in developing countries would drive demand for both the Neo and MAX models, as well as for current-generation aircraft, as airlines sought to increase capacity while facing long waiting lists for the new models. The strong order backlogs of Airbus and Boeing also made the second-hand market an appealing option for fast-growing carriers.[41]

In March 2015, Avolon released an updated analysis of the key factors influencing the economic life of commercial jet aircraft, building upon the previous analysis issued in September 2012. The 2015 analysis also addressed aircraft retirement and storage trends. The paper concluded that retirement patterns had not significantly changed since 2012, with the average retirement age remaining around 25 years and more than 50% of fleets staying in service beyond that point.[18]

Documentary on Irish Aviation: 'Pioneers and Aviators'

[edit]

In November 2013, Avolon announced the commissioning of a documentary titled "Pioneers and Aviators: A Century of Irish Aviation," which explores the history of Irish aviation. The documentary highlights the achievements and challenges of pioneering individuals who played a significant role in shaping Ireland's aviation landscape. It covers various milestones such as the first transatlantic flight by Alcock and Brown, the evolution of Aer Lingus, the development of airports at Foynes, Shannon, and Dublin, the contributions of Tony Ryan, the rise and fall of GPA, and the enduring influence of Ryanair. The documentary was directed by Alan Gilsenan, an accomplished filmmaker, writer, and theater director, with the score composed by Mícheál Ó Súilleabháin in collaboration with the RTÉ Concert Orchestra.

The premiere of the documentary took place at the Irish National Concert Hall in Dublin on January 22, 2014. It was later broadcast in two episodes on RTÉ Television on February 20 and 27, 2014.[17]

In June 2015, Avolon launched a commemorative photographic book bearing the same title, "Pioneers and Aviators, A Century of Irish Aviation." The book was officially unveiled at an event held at Casement Aerodrome in Baldonnel, Co. Dublin, attended by Taoiseach Enda Kenny TD, Domhnal Slattery (Avolon CEO), Eamonn Brennan (Chief Executive of the Irish Aviation Authority), and Brigadier General Paul Fry (GOC of the Air Corps).[42]

Europe's first MSc in Aviation Finance

[edit]

In April 2016, the UCD Michael Smurfit Graduate Business School launched the first MSc in Aviation Finance in Europe. Avolon, along with other prominent aircraft leasing companies, is an industry partner for this master's degree program.[43]

The primary objective of the course is to support and maintain Ireland's status as the largest hub for aviation finance and leasing worldwide.[44]

Initiatives with the Royal Hibernian Academy

[edit]

In October 2015, Avolon announced two initiatives in collaboration with the Royal Hibernian Academy (RHA) as part of its corporate and social responsibility program.[45] These initiatives are the Avolon Global Studio and the Avolon Youthreach Program. The launch event was attended by Domhnal Slattery, Avolon CEO; Mick O'Dea, RHA President; and Patrick T. Murphy, RHA Director.

Avolon Global Studio: In partnership with Avolon, the RHA initiated a global search for an artist who would be awarded a 6-month studio placement at the RHA during 2016, 2017, and 2018. The first residency began in July 2016, providing an exceptional opportunity for an emerging international artist to gain exposure on a global scale and develop their artistic practice within one of Ireland's leading contemporary art organizations. In April 2016, Avolon and the RHA announced that Colombian artist Adriana Salazar would be the first participant in the Avolon Global Studio Program.[46] The second artist to join the program in 2017 was Iranian artist Jinoos Taghizadeh.[47] The selection for the third artist to receive the Avolon Global Studio Award will be from India.[48]

Avolon Youthreach Program: In collaboration with the national Youthreach scheme, the RHA will invite six young students, chosen from submissions received from the 160 Youthreach Centers across the country, to participate in four workshops. These workshops aim to enhance their artistic skills, introduce them to art galleries and colleges, and provide fundamental tools of artistic criticism. By working alongside practicing artists, the students will not only develop practical skills but also gain insights into the opportunities and challenges of pursuing a professional artistic career in Ireland.[49]

Awards

[edit]

Avolon has been recognized with various industry awards, including the Airfinance Journal 2020 Lessor of the Year Award.[50] In 2016, Avolon received the Company of the Year and Aviation Leasing Achievement of the Year Awards at the Aviation Industry Awards. Domhnal Slattery, CEO of Avolon, was honored with the Outstanding Contribution to the Aviation Industry award in 2016.[51] Slattery has also been awarded the NYU Ireland House 2020 Lewis L. Glucksman Award for Leadership and the 2021 Ireland-US Council Award for Outstanding Achievement.[52]

References

[edit]
  1. ^ "CVC Capital Partners - Our Companies - Avolon". 2010-12-18. Archived from the original on 25 December 2010. Retrieved 2010-12-18.
  2. ^ "Airline Industry and Aviation Safety News from Flightglobal". 2010-12-18. Retrieved 2010-12-18.
  3. ^ "Avolon - Our Business". 2010-12-02. Archived from the original on 29 January 2011. Retrieved 2010-12-18.
  4. ^ "Avolon raises 14 billion - Airfinance Journal - May 2010". 2010-12-18. Retrieved 2010-12-18.
  5. ^ a b "Avolon - Our News" (PDF). Archived from the original (PDF) on 2015-02-05. Retrieved 2014-02-12.
  6. ^ a b c "Avolon News".
  7. ^ a b "Orix Buys Stake in Jet-Lessor Avolon as HNA Extends Asset Sale".
  8. ^ "Vertical Wins American, Avolon Orders, Plans to Go Public".
  9. ^ "Avolon's management changes as new CEO take up role".
  10. ^ "Avolon Equity Deal of the Year=2012-04-17".
  11. ^ "Wells Fargo forms aircraft leasing venture". Reuters. 2013-01-17. Retrieved 2020-02-04.
  12. ^ "WSJ - Bank to Launch Jet Venture". The Wall Street Journal.
  13. ^ a b c "Avolon - Our News" (PDF). Archived from the original (PDF) on 2013-11-02. Retrieved 2013-07-23.
  14. ^ "Avolon Announces Pricing of US$636m Fixed Rate Asset Backed Notes by Emerald Aviation Finance" (PDF). Archived from the original (PDF) on 2013-11-02. Retrieved 2013-09-27.
  15. ^ "Avolon News" (PDF). Archived from the original (PDF) on 2013-11-02. Retrieved 2013-10-16.
  16. ^ "Avolon News" (PDF). Archived from the original (PDF) on 2013-11-05. Retrieved 2013-11-04.
  17. ^ a b "Pioneers and Aviators". Retrieved 2013-11-20.
  18. ^ a b c "Avolon - Deals". Retrieved 2015-04-11.
  19. ^ DeMuth Jr., Chris (8 January 2016). "Apple Reads Your Mind". M&A Daily. Seeking Alpha. Retrieved 9 January 2016.
  20. ^ "Avolon to acquire 45 aircraft from GECAS" (PDF). Archived from the original (PDF) on 2016-08-17. Retrieved 2016-07-12.
  21. ^ "Avolon News".
  22. ^ "Avolon signs up for 75 Boeing 737 MAX 8 planes, and will consider 737 MAX-10 models". Retrieved 2017-06-20.
  23. ^ "Avolon opens global headquarters in Ballsbridge".
  24. ^ "Avolon Celebrates the World's First A330neo Delivery to TAP Airlines".
  25. ^ "Avolon orders 100 A320neo-family jets".
  26. ^ "Moody's upgrades Avolon's corporate family and senior unsecured ratings to Baa3 with a stable outlook, concluding review".
  27. ^ "Avolon LEAP-1A Engine Order".
  28. ^ "Vertical Wins American, Avolon Orders, Plans to Go Public".
  29. ^ "Avolon to become major player in global air cargo market".
  30. ^ "Avolon's management changes as new CEO take up role".
  31. ^ "Newsroom and Thoughts".
  32. ^ "Vertical Aerospace to go public at $2.2 billion valuation with up to 1,000 aircraft pre-orders".
  33. ^ "Vertical Wins American, Avolon Orders, Plans to Go Public".
  34. ^ "Avolon and Japan Airlines Partner".
  35. ^ "Aircraft Leasing – Ireland and the Cayman Islands as Key Locations" (PDF). 2013. Archived (PDF) from the original on 2013-03-19.
  36. ^ "MUFG unit buys US aircraft leasing group". Financial Times. 4 October 2012.
  37. ^ "Ireland needs educational focus on entrepreneurship from a young age".
  38. ^ "India, a 21st Century Powerhouse" (PDF). Archived from the original (PDF) on 2018-07-16. Retrieved 2018-07-16.
  39. ^ "The Land of Silk and Money".
  40. ^ "Financial Times - Aviation leasing – fleet footed". Retrieved 2012-10-04.
  41. ^ "Financial Times - Sales of used commercial jets buoyant". Retrieved 2013-02-24.
  42. ^ "Avolon News". Retrieved 2015-06-30.
  43. ^ "Avolon News".
  44. ^ "UCD - MSc in Aviation Finance".
  45. ^ "RHA Gallery".
  46. ^ "Avolon Global Studio 2016".
  47. ^ "Avolon Global Studio 2017".
  48. ^ "Avolon Global Studio 2018" (PDF). Archived from the original (PDF) on 2018-07-16. Retrieved 2018-07-16.
  49. ^ "Avolon RHA Press Release" (PDF). Archived from the original (PDF) on 2016-02-05. Retrieved 2014-01-16.
  50. ^ "Industry Recognition".
  51. ^ "Aviation Awards 2016 Winners".
  52. ^ "Colm Tóibín, Dómhnal Slattery honorees at Glucksman Ireland House awards dinner".
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