Irish lessor Avolon closed out the first quarter of 2018 with an owned and managed fleet comprising 570 aircraft, with commitments for a further 333 aircraft, bringing its total fleet to 903, up 6.2% from 1Q 2017.

The company delivered six new aircraft during the quarter, including four Boeing 787-9s (two for Air Europa and one each to Virgin Atlantic and Norwegian Air) and an Airbus A320neo for Air India. Additionally, 13 aircraft were transitioned to secondary leases, five aircraft were sold, and 21 lease transactions (new leases, second leases and lease extensions) were completed during the quarter.

Significantly, on March 23 Avolon established a “special purpose” securitization trust company—Sapphire Aviation Finance—with $768.4 million in fixed rate secured note backings by three issuers, backed by a portfolio of 41 mid-life aircraft Avolon contracted to sell to Sapphire using the proceeds of the issuance.

The aircraft, which include six 737-700s, 14 737-800s, four A319-100s, eight A320-200s, five A330-200s, two 767-300s, an A321-100 and an A330-300, have an appraised value of $962s.4 million and are on lease to 30 lessees in 19 countries, including Air Canada, Air Transat, Azul, Garuda Indonesia, Sri Lankan Airlines and Qantas, among others.

“The disposal of 41 aircraft from the Avolon fleet, facilitated by the launch of the Sapphire vehicle, opens another channel for Avolon to bring third party investment into the mid-life aircraft space whilst increasing our managed fleet and expanding our footprint as a servicer in the ABS [asset-backed securitization] market,” Avolon CEO Domhnal Slattery said.

Avolon became the world’s third largest aircraft lessor following its purchase of CIT Group’s leasing arm in early 2017. Only US-based lessor GE Capital Aviation Services (GECAS) and Dublin-based lessor AerCap have larger owned, managed and committed aircraft portfolios.

Avolon is a wholly owned indirect subsidiary of China’s Bohai Capital Holding. Bohai, a subsidiary of Chinese conglomerate HNA Group, acquired Avolon in January 2016. Avolon itself launched as a standalone company in 2010.

Mark Nensel