Recent figures demonstrate the strong 2010 experienced by FLY Leasing, the global lessor of modern, fuel-efficient commercial jet aircraft. The company, which is managed and serviced by BBAM LLC, a global aircraft lease manager with more than 20 years experience, produced its financial results for 2010 on March 2.

“FLY had strong financial results for the year, with net income of $52.7m,” said Colm Barrington, CEO of FLY Leasing. “While these results were lower than the prior year, the 2009 year had benefited from a significant $82.7m pre-tax gain from the repurchase of notes payable.

“FLY finished 2010 with $329m in cash, of which $164m was unrestricted and uncommitted, which puts the company in a robust position to pursue further growth opportunities in 2011.

“During 2010 we took advantage of rising aircraft prices by actively managing our portfolio and selling four aircraft, all at attractive premiums to book value,” added Barrington.

“Two of these aircraft were more than 15 years old. Meanwhile, we acquired two brand new 737-800s on long-term leases, helping to lower the age of our fleet, strengthen our revenues and diversify our base of lessees. FLY’s portfolio of modern and popular commercial aircraft has continued to perform well. All 60 of our aircraft are now committed to leases.

Revenue streams

“In April 2010, we acquired a 15% interest in BBAM, FLY’s manager and servicer, for $8.8 million,” said Barrington. “We earned $2.9m in the first eight months from this investment, which has helped FLY diversify its revenue streams.

“FLY’s strategy of selling older aircraft at premiums to book value, acquiring aircraft on lease, repurchasing shares and debt at discounts and building up significant cash reserves has put the Company in a very strong position to pursue further smart growth opportunities and benefit from the strengthening aviation industry,” said Barrington. “We look forward to further progress in 2011.”

This optimism is reinforced by US figures manufacturing figures for January 2011, as orders to US factories climbed by 3.1%, the highest increase since September 2006.

Bookings surge

A strong factor in this growth is the strength of demand for commercial aircraft, as the value of airplane bookings surged to $7.4bn in January, up from $141m the previous month.

“The airlines had a great year in 2010 and are now looking at growth again, which will be good for aircraft values and lease rates,” Barrington told Asset Finance International.

“FLY is in a strong financial position to take advantage of this improving leasing environment. We have a robust reserve of cash and continue to look for smart opportunities to grow our fleet and to enhance shareholder value.”

“Looking ahead, we see the rising price of oil as the biggest short term challenge that the airline industry is facing.”

At December 31, 2010, FLY’s aircraft were on lease to 34 lessees in 23 countries. The one aircraft that had not been leased as of the end of 2010 was delivered to a new lessee in March 2011. FLY has one further aircraft with a scheduled lease expiry in 2011, for which a new five-year lease has already been arranged.