Avation PLC, a London-listed aviation lessor, discussed its long-term fleet strategy and valuation metrics at the Sidoti Micro-Cap Investor Conference on August 19, 2026. The company, which operates 33 aircraft with a total asset base of about $1 billion, currently trades at approximately $114 million in market capitalization—a roughly 50% discount to its net asset value based on closing prices.
The firm’s fleet is diversified across 19 ATR turboprops, narrow-body aircraft, and wide-body jets, with an average age of nine years and lease terms averaging four years. About 80% of its exposure is concentrated in the Asia-Pacific region, where demand for leased aircraft remains robust. Management noted that lease rate factors for turboprops are around 1.0x, while narrow-body aircraft range between 0.7x and 0.8x.
Avation projects a fleet compound annual growth rate of at least 10% through 2030, supported by a firm order book of 13 aircraft scheduled for delivery by decade’s end. The company also holds purchase rights for an additional 19 aircraft, with rights exercisable through 2034. These rights, valued at $86 million as of December 31, represent potential aircraft value exceeding $400 million and could support roughly $750 million in additional asset value over the next decade.
The company’s valuation gap persists despite strong operational metrics, including a beta of 0.12, indicating low price volatility. Management highlighted a supply-demand imbalance in the aircraft leasing market, with original equipment manufacturers struggling to meet demand. Tim Bacchus, Director of Investor Relations, stated that having aircraft in a seller’s market positions the company favorably.
Avation has historically acquired around 80 aircraft worth $2 billion and sold 45 for gross proceeds of $1.2 billion. The firm raised over $80 million on the London Stock Exchange and $800 million in debt capital markets. In fiscal year 2025, it generated a $10 million cash gain from selling two aircraft on delivery, with a $5 million gain per aircraft.
The company aims to return to its pre-COVID fleet size of 48 aircraft by June 2029 with secondary market purchases or by June 2030 without additional acquisitions. Debt maturities are extended through 2031, providing financial flexibility. Management also noted that speculative lessor market participants are expected to decline from about 15 in 2025 to around seven or eight by 2030, reinforcing the structural advantage for established lessors like Avation.
