BOC Aviation ends HY1 with $804 million write-off on Russia

Lessor BOC Aviation has taken an $804 million write-off in its HY1 results on seventeen of its aircraft that are still in Russia. Because of the one-off impact, BOC ended the first six months with a net loss after tax of $-313 million. BOC Aviation ends HY1 with $804 million write-off on Russia.

The write-off is lower than what BOC communicated before. In March, it said the net book value of eighteen owned aircraft in Russia was estimated at a gross of $935 million. A month later, it specified this as $589 million for seventeen owned and one managed aircraft, net of all cash collateral that was held for the aircraft. The $804 million write-off announced today is partially offset by $223 million in cash collaterals for the ‘Russian’ aircraft, plus $63 million in tax credits. Before February 24 and the Russian invasion of Ukraine, BOC Aviation had Aeroflot, Pobeda, S7, and Airbridge Cargo as its customers in Russia. In June, insurance claims were filed for the seventeen aircraft.  

The $-313 million compares to a $254 million profit for HY1 2021. Revenues were $1.196 billion versus $1.107 billion last year. The operating cash flow was 29 percent higher to $717 million. The lease collection rate was 96.9 percent, up one percentage point. “As airline demand picks up following the Covid pandemic, we signed lease commitments for 14 of the 17 aircraft off lease, including all five passenger twin-aisle aircraft”, BOC Aviation says in its financial statements. It has $454 million in cash and short-term deposits, plus $5.5 billion available in undrawn credit facilities from its shareholder Bank of China. Total liabilities stood at $4.9 billion, down from $5.3 billion in December.

The Singapore company had an owned fleet of 390 aircraft and 37 managed aircraft. It sold five aircraft and transitioned six used ones to airline customers. BOC Aviation took delivery of twenty new aircraft in HY1. It has 181 aircraft on order, including 111 Airbus A320neo family aircraft after ordering eighty in April. Next is a backlog for 49 Boeing MAX aircraft, plus 21 787s. In June, BOC canceled orders for three 787-9s. 

Richard Schuurman

Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016. Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.

See Full Bio