TRAILING TWELVE-MONTH EARNINGS NOW EXCEED FULL-YEAR 2025

Avolon, the Dublin-headquartered aviation finance company, has reported net income of US$209 million for the second quarter of 2026, an increase of 45% on the US$143 million recorded in the same quarter of 2025. Lease revenue rose 7% to US$726 million from US$678 million, and operating cashflow rose 8% to US$501 million from US$464 million. Trailing twelve-month net income reached US$702 million, up 31% year-on-year, with operating cashflow of US$2.4 billion over the same period.

The trailing figure provides the clearest measure of the scale of the improvement. Avolon reported full-year 2025 net income of US$591 million, itself up 29% year-on-year excluding the effect of insurance settlements received in 2024 in relation to aircraft detained in Russia. With two quarters of 2026 completed, the twelve-month figure already exceeds the full prior year by 19%. Andy Cronin, Avolon’s Chief Executive, said the company had delivered another strong quarter, that the S&P upgrade during the period reflected the strength of its business and balance sheet, and that with demand for aircraft remaining strong and supply constraints continuing across the industry, its orderbook positioned the company for continued growth.

SEQUENTIAL MOVEMENT: REVENUE DOWN, EARNINGS UP

Comparison with Avolon’s first quarter, reported in April, shows a divergence between the revenue and earnings lines. Lease revenue fell from US$762 million in the first quarter to US$726 million in the second, a sequential decline of US$36 million. Operating cashflow fell from US$540 million to US$501 million. Net income moved in the opposite direction, rising from US$191 million to US$209 million.

The pattern is consistent with the composition of the quarter’s fleet activity. Avolon acquired 21 aircraft and sold 30 during the second quarter, against 14 acquired and 19 sold in the first — a net disposal of nine aircraft in the second quarter compared with five in the first. Selling aircraft removes their contracted lease revenue from subsequent periods while generating a gain on sale recognised in the quarter of disposal. The owned, managed and committed fleet accordingly fell to 1,117 aircraft at 30 June from 1,131 at 31 March, with total assets declining to US$33,962 million from US$34,702 million at the end of the first quarter and US$34,418 million at the end of 2025. The company ended the quarter with 109 aircraft agreed for sale, up from 84 at the end of the first quarter, and commitments for 503 aircraft against 506 previously.

RATINGS ALIGNMENT COMPLETED AND LEVERAGE REDUCED

S&P Global Ratings upgraded Avolon’s issuer credit rating and senior unsecured debt rating to BBB with a stable outlook during the quarter, aligning the agency with Moody’s at Baa2 and Fitch at BBB and giving Avolon a consistent investment grade rating across all three major agencies. The S&P action followed rating upgrades at Moody’s and Fitch in May 2025, at which point S&P moved its outlook on a BBB− rating to positive.

Leverage metrics moved favourably during the quarter. Net debt to equity fell to 2.5 times from 2.7 times at the end of the first quarter, and the sources to uses ratio improved to 2.0 times from 1.8 times. The unsecured to total debt ratio held at 79%, up from 77% at the end of 2025. Total available liquidity rose 11% from the 2025 year-end position to US$11,879 million, comprising US$356 million of unrestricted cash and US$8 billion in undrawn debt facilities. The composition of that liquidity shifted during the quarter: unrestricted cash fell from US$534 million at the end of March, with the increase in headline liquidity therefore attributable to facility capacity rather than to cash on hand. The Board approved an interim dividend of US$201 million in respect of the first half of 2026, against a full-year 2025 dividend of US$297 million of which US$151 million related to the second half.

FLEET AND CUSTOMER BASE

Avolon works with 138 airlines in 60 countries and held an owned, managed and committed fleet of 1,117 aircraft as at 30 June 2026. The company reported in April that 85% of its orderbook commitments were placed through the end of 2028, and stated in its second quarter business update earlier this month that the figure stood at 80% following the placement of nine new-technology aircraft during the quarter. Avolon acquired 168 aircraft during 2025, including 106 as part of the Castlelake Aviation transaction, and sold a record 95 aircraft with an average age of ten years over the same year.