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ORIX Corporation (IX) operates as a Japan-based global diversified financial services group with American depositary shares listed on the NYSE. Its business spans financing and investment, life insurance, banking, asset management, real estate, concession, environment and energy, automobile-related services, industrial and ICT equipment, ships and aircraft, reflecting its development from leasing roots in Japan.
Recurring news covers ORIX Group and ORIX Corporation USA activity, including asset management, private credit, growth capital financing, commercial real estate credit, subsidiary acquisitions and portfolio-company developments. Updates also include annual Form 20-F submissions, governance and organizational changes, and the integration of Hilco Global as a majority-owned ORIX USA subsidiary focused on professional services and capital solutions.
Avolon announced a commitment to order 40 Boeing 737 MAX aircraft, valued at over $4 billion at current list prices. The deliveries are scheduled between 2027 and 2030, and this will expand Avolon's fleet to a total of 870 aircraft. This decision underlines Avolon's confidence in the aviation market's recovery and aligns with their strategy to incorporate more fuel-efficient aircraft, as the 737 MAX reduces fuel use and emissions by 20%. The transaction awaits approval from Bohai Leasing Co., Ltd., Avolon’s 70% shareholder, expected by the end of May.
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Avolon reported significant financial results for FY 2022, showcasing a five-fold increase in adjusted net income to $253 million, excluding the impact of location value="LC/ru"Russia. Lease revenue rose by 9% to $2.3 billion, while operating cash flow surged 35% to $1.2 billion, exceeding pre-pandemic levels. Total liquidity reached $5.6 billion. The company maintained a solid fleet of 576 aircraft and executed 237 lease transactions, strengthening its market position. Despite a reported net income decline to $9 million, Avolon anticipates positive growth in 2023, driven by rising demand and the reopening of location value="LC/cn"China.
The aviation sector is poised for recovery in 2023, with global passenger traffic expected to return to pre-pandemic levels by June, driven significantly by China's reopening. Avolon forecasts a profit of approximately $4.7 billion for the sector this year following a partial recovery in 2022. Key findings indicate airlines are improving revenues despite lower traffic, while manufacturers face delivery delays leading to aircraft shortages, enhancing the long-term value of existing planes. Lease rates are expected to rise, benefiting lessors that now manage over 53% of the global passenger fleet. Sustainable Aviation Fuel (SAF) production needs substantial investment to meet future demands.
Avolon reported strong performance for 2022, executing 237 lease transactions and delivering 107 aircraft. A notable agreement with Malaysia Airlines includes financing for 20 A330-900neo aircraft valued over $2 billion. The company raised $2.2 billion in new financing, increasing its total revolving debt capacity to over $6 billion. Avolon received a Low Risk ESG rating of 16.0 from Sustainalytics and partnered for a Sustainable Aviation Fuel study. The outlook for 2023 remains positive as global travel demand recovers.
Avolon reports a net income of $141 million for Q3 2022, showing significant recovery from a net loss of $33 million in the same period the previous year. The company recognized $546 million in lease revenue and generated $278 million in operating cash flow. Total available liquidity reached approximately $6.8 billion, boosting financial stability. Avolon also announced a landmark financing transaction with Malaysia Airlines for 20 aircraft valued over $2 billion. This performance marks the strongest quarter for Avolon post-pandemic.
Avolon, the international aircraft leasing company, released its Q3 2022 update, highlighting significant fleet activities. The company completed 54 lease transactions, including a major deal with Malaysia Airlines for 20 A330-900neo aircraft valued over $2 billion. Avolon sold 13 aircraft and delivered 4 to various customers. The fleet expanded to 568 owned and managed aircraft, with 265 new technology aircraft on order. Additionally, Avolon upsized its unsecured revolving credit facility by $0.2 billion, now totaling $4.6 billion, while announcing key leadership appointments.
Avolon appoints new executive team members
Ross O’Connor is now Chief Financial Officer, Felipe Campos becomes Chief Operating Officer, and Jim Morrison is appointed Chief Risk Officer. All three are elevated from senior management positions and will join the Executive Committee immediately. Following a transition, Dómhnal Slattery has stepped down as CEO, with Andy Cronin assuming the role. This restructuring aims to bolster Avolon's leadership as a leader in the global aircraft leasing sector.
Avolon has entered a financing transaction with Malaysia Aviation Group to acquire 20 A330-900neo aircraft, which will be powered by Rolls-Royce engines. This deal entails leasing 10 of the aircraft from Avolon's orderbook and 10 directly acquired from Malaysia Aviation Group. Deliveries are scheduled from 2024 onward, strengthening Avolon's fleet position as they now have only two unplaced A330neo. The collaboration enhances MAG’s operational efficiency and positions it to capitalize on the recovering Asian aviation market.
Dómhnal Slattery, founding CEO of Avolon, is stepping down after 12 years, during which he transformed the company into the world's second-largest aircraft lessor with assets exceeding US$30 billion. Andy Cronin, previously President and CFO, has been appointed CEO Designate. The transition aims for continuity and growth as Avolon seeks to maintain its industry leadership. Slattery's departure signals a new phase for the company, with Cronin's experience expected to facilitate ongoing innovation and development.