Space and Aviation

Middle East Biggest Plane Lessor DAE On Strong Financial Position, Hopes Return Of Air Travel Demand By This Summer

One of the largest aircraft leasing companies in the world, Dubai Aerospace Enterprise Ltd (DAE) has expected that by mid-2021 the air traffic will overcome all its recovery process. Further, DAE has expected that it will meet the target of USD 1.1 billion in deals with several airlines to buy and lease back the aircraft this particular year.

The company has expected wide ranges of traveling after the supply flow of Covid-19 vaccine increases and hence therefore it has expected a solid pipeline of deals and is further on track to do more business in 2021 than last year. 

Mr. Tarapore, CEO of DAE explained that the central case is very much in the play, and hence the snapback will turn out to be an important milestone for resumption to pre 2020 activity in near future after that. He further explained that a lot of airlines will fundamentally believe that demand for air traffic will ultimately be as robust as it was over the last few decades, and then the resumption to the trend will go quite rapid.

DAE has been focusing on organic growth rather than acquiring planes through orders or by taking over rival lessors. The company had set a target to expand the fleet to 800 jets by 2026 or 2028. However, due to the pandemic effect across the global aviation industry, it is now re-examining the impact around.

On Wednesday, there was a full report of DAE showing a profit of USD 228.9 million in the year 2020. This figure was USD 377.5 million in the year 2019. The impact of Covid 19 was seen drastically as the revenue dropped amazingly. Despite providing rent payment deferrals or lease amendments to its clients as airlines faced financial pressures during the pandemic, it had achieved this financial picture. 

Mr. Tarpore explained that they are still happy with the financial results because they are embedded in the outcome through the client’s support. The company has made underwriting commitments for 55 new aircraft out of which 38 were for the owned portfolio. 38 out of these 55 were set for delivery in the year 2020 itself which Mr. Tarapore explained as the strength and agility in this type of market.

Following are the major financial highlights of DAE for the year 2020, which was published on 10th February 2020.

  • Total Revenue: USD 1300.3 million
  • Profit Before Tax: USD 250.2 million
  • Debt to Equity Ratio: 2.57
  • Available Liquidity: USD 2693 million
  • Share Repurchases: USD 350.1 million
  • Bonds Repurchases: USD 192.1 million

Commenting on the financial details, Tarapore, CEO of DAE, said that 2020 had been an extraordinary year with pandemic creating impact over air traffic demand along with airlines and need for aircraft. In such a difficult environment too, DAE was able to demonstrate the power of franchise by firstly using the liquidity position to assist customers, as promised, through rent deferral agreements, secondly by making underwriting commitments for the next 55 aircraft, and by taking delivery of 38 of them in 2020, and finally by further strengthening liquidity and capital position of the company.

DAE holds a history of 30 years in this business and has leasing and engineering divisions that service over one hundred and ten airline customers across the world. It has been serving airline customers from seven different locations – Dublin, Singapore, Miami, New York, Seattle, Amman, and Dubai.

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