Fly Leasing acquires new aircraft amid challenges
Commercial aircraft lessor Fly Leasing Ltd. reported a net income of $4.1 million for the second quarter of 2011, a whopping $9.1 million less than last year. This news comes on the heels of the company’s agreement to acquire 49 new aircraft from Global Aviation Asset Management, increasing its fleet by 80 percent.
Fly Leasing attributes its second-quarter loss to a combination of factors, including readying aircraft for their new leases and entering into an agreement to purchase the $1.4 billion fleet. However, it’s the latter expenditure that will propel the company’s operations in the future, Fly executives said.
Once the sale is complete, Fly will acquire 23 aircraft from the Airbus A320 family — elevating its total number of A320s to 49 — and 17 Boeing 737s, increasing its 737 fleet to 36. Fly will also gain three A340s and six Boeing 717s. It will then lease these aircraft out to Qantas, Hainan, British Airways and Air Berlin, among others.
Fly CEO Colm Barrington points to the myriad business implications of these new deals. “The aircraft are leased to strong, well-run airlines around the world that will increase Fly’s annualized revenues by over 80 percent to approximately $370 million,” he said in a statement.
Half of the newly acquired aircraft will be leased to European carriers, with Asia-Pacific airlines comprising 38 percent of the lessees. What’s more, Fly officials maintained, most of the carriers leasing the aircraft are new customers.
To Barrington, this signals good news for Fly’s future operations. “We remain optimistic about the continuing and increasing strength of the aircraft leasing industry, which is reinforced by recent significant orders for new aircraft from airlines in both Asia and North America,” he said in a statement. “We will continue to opportunistically pursue attractive one-off and portfolio acquisitions.”