AWAS Annual Report FYE 2016 Published

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DAE Capital

Letter from the CEO

AWAS has grown into one of the most respected aircraft leasing platforms over the course of its 30-year history. This evolution has been steered by a number of owners, notably Terra Firma and the Canadian Pension Plan Investment Board (CCPIB). Following a decade of prudent management, Terra Firma and CCPIB have agreed to sell AWAS to Dubai Aerospace Enterprise (DAE) Ltd.

This agreement is very positive for AWAS and will allow our business to move into the next phase of growth. AWAS remains committed to a stable growth strategy and will continue to look for opportunities to provide aircraft lease and fleet solutions to our airline customers.

he acquisition of AWAS by DAE takes place following a record year for the airline industry, with profits at an all-time high and most airlines on a path to sustained profitability. The past decade has seen the industry undergo fundamental change. Legacy airlines have restructured themselves and the efficient low-cost business model is now firmly established in almost every region of the world. The benefits of these changes have translated into an upswing in passenger numbers globally. In short, the industry has never been healthier and its future has never been brighter.

This turnaround has resulted in strong growth for the aircraft leasing industry, underscored by robust financial performance and the continuing shift towards leasing by airlines. This is good news for lessors, who form an integral part of airline fleet financing and strategy – representing around 40% of all financings today and headed towards 50% of the total market over the next couple of decades.

Within this favourable environment, AWAS delivered excellent returns for its shareholders, with operating profit before tax of $246.6m on $956.4m in revenues. Of note, AWAS closed 52 new leasing transactions with 33 customers and sold 59 aircraft, principally through two significant portfolio sales, including the completion of the sale of the “SkyFin” portfolio to Macquarie, one of the largest aircraft divestments in our industry.

Last year we completed the re-balancing of our portfolio, eliminating all out of production passenger aircraft from our fleet. Going forward, AWAS will continue to focus on the most liquid and in-demand aircraft types, with a particular emphasis on fuel efficient planes. At year-end, AWAS had 214 aircraft on lease to 87 customers in  48 countries.

AWAS also completed a forward order for 23 new, fuel efficient A320 family aircraft  from Airbus, which will deliver from August 2017 to December 2018. These aircraft are a great value proposition for our customers as evidenced by the continued global demand for Airbus single aisle aircraft. This pipeline puts us in a strong position to provide extra capacity to our airline customers as passenger demand grows over the next couple of years.

Our strategic focus continues to be the management of our portfolio in order to optimise customer concentration, whilst maintaining diverse sources of financing at competitive rates. AWAS has one of the broadest client-bases in the business compared to the size of its fleet. This balanced approach to risk management ensures that AWAS does not have undue exposure to any particular carrier, country or region.

Most importantly as we are in a core knowledge business, it is our people who continue to drive the success of AWAS, maintaining the 30+ year proven track record of customer-focused performance. AWAS now embarks upon a new era of ownership, and is well placed to deliver sustained growth.

Signed /s/ D. Siegal David N. Siegel
Chief Executive Officer
April 2017

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