REG - DP Aircraft I Ltd - Half-year Report
30/09/2024 07:00
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RNS Number : 1210G DP Aircraft I Limited 30 September 2024
30 September 2024
DP Aircraft I Limited (the 'Company')
Interim Report and Accounts
The Company is pleased to provide a copy of the Unaudited Condensed
Consolidated Interim Report for the six-month period ended 30 June 2024 (the
"Interim Report"), which is available from the Company's registered office and
will shortly be available to view or download from the Company's website
www.dpaircraft.com (http://www.dpaircraft.com)
For further information, please contact:
Aztec Financial Services (Guernsey) Limited +44(0)
1481 748831
Sarah Felmingham / Chris Copperwaite
DP AIRCRAFT I LIMITED
UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORT
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2024
CONTENTS
3 Fact Sheet
4 Summary
7 Highlights
9 Chairman's Statement
11 Asset Manager's Report
23 Directors' information
24 Statement of Principal Risks and Uncertainties
27 Statement of Directors' Responsibilities
28 Condensed Consolidated Statement of Comprehensive Income (unaudited)
29 Condensed Consolidated Statement of Financial Position (unaudited)
30 Condensed Consolidated Statement of Cash Flows (unaudited)
31 Condensed Consolidated Statement of Changes in Equity (unaudited)
32 Notes to the Unaudited Condensed Consolidated Financial Statements
48 Company Information
FACT SHEET
Ticker DPA
Company Number 56941
ISIN Number GG00BBP6HP33
SEDOL Number BBP6HP3
Traded Specialist Fund Segment ('SFS') of the London Stock Exchange
SFS Admission Date 4-Oct-13
Share Price US$ 0.0650 at 30 June 2024
Earnings per share US$ 0.01106 for the period ended 30 June 2024
Country of Incorporation Guernsey
Current Shares in Issue 239,333,333
Administrator and Company Secretary Aztec Financial Services (Guernsey) Limited
Asset Manager DS Aviation GmbH & Co. KG
Auditor KPMG Channel Islands Limited
Corporate Broker Investec Bank Plc
Aircraft Registrations HS-TQD
HS-TQC
Aircraft Serial Numbers 35320
36110
Aircraft Type and Model Boeing 787-8
Lessee Thai Airways International Public Company Limited ('Thai Airways')
Website www.dpaircraft.com (http://www.dpaircraft.com)
SUMMARY
COMPANY OVERVIEW
DP Aircraft I Limited (the 'Company') was incorporated with limited liability
in Guernsey under the Companies (Guernsey) Law, 2008 on 5 July 2013 with
registered number 56941.
The Company was established to invest in aircraft. The Company is a holding
company and made its investment in aircraft held through two wholly owned
subsidiaries, DP Aircraft Guernsey III Limited and DP Aircraft Guernsey IV
Limited (collectively and hereinafter, the 'Borrowers'), each being a Guernsey
incorporated company limited by shares and one intermediate lessor company, DP
Aircraft UK Limited (the 'Lessor'), a UK incorporated private limited company.
The Company and its consolidated subsidiaries, DP Aircraft Guernsey III
Limited, DP Aircraft Guernsey IV Limited and DP Aircraft UK Limited comprise
the consolidated Group (the 'Group').
Pursuant to the Company's prospectus dated 27 September 2013, the Company
issued 113,000,000 ordinary shares of no-par value at an issue price of US$
1.00 per ordinary share by means of a placing. The Company's ordinary shares
were admitted to trading on the Specialist Fund Segment of the London Stock
Exchange on 4 October 2013 and the Company was listed on the Channel Islands
Securities Exchange until 27 May 2015.
On 5 June 2015, the Company issued 96,333,333 ordinary shares of no-par value
at an issue price of US$ 1.0589 per ordinary share by means of a placing.
These shares were admitted to trading on the Specialist Fund Segment of the
London Stock Exchange on 12 June 2015.
On 13 July 2022, the Company raised gross proceeds of US$750,000, due to
lender restrictions on the DP Aircraft I Limited Topco balance, through the
issue of 30,000,000 additional ordinary shares in the capital of the Company
at a price of US$0.025 per share. These additional ordinary shares were
admitted to trading on the Specialist Fund Segment of the London Stock
Exchange on 15 July 2022.
In total there are now 239,333,333 ordinary shares in issue with voting
rights.
In addition to the equity raised above in 2013, 2015 and 2022, the Group also
utilised external debt to fund the initial acquisition of the aircraft.
Further details are given within this summary section.
INVESTMENT OBJECTIVE
The Company's investment objective is to obtain income and capital returns for
its shareholders by acquiring, leasing and then, when the Board considers it
appropriate, selling aircraft (the 'Asset' or 'Assets').
THE BOARD
The Board comprises of independent Directors (the 'Directors') or (the
'Board'). The Directors of the Board are responsible for managing the business
affairs of the Company and Group in accordance with the Articles of
Incorporation and have overall responsibility for the Company's and Group's
activities, including portfolio and risk management while the asset management
of the Group is undertaken by DS Aviation GmbH & Co. KG (the 'Asset
Manager').
THE ASSET MANAGER
The Asset Manager has undertaken to provide asset management services to the
Company and Group under the terms of an asset management agreement but does
not undertake any regulated activities for the purpose of the UK Financial
Services and Markets Act 2000.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
The Group recognises the Paris Agreement on climate change. The Group operates
NTA ('New Technology Aircraft'); specifically Boeing 787-8's equipped with
Rolls Royce Trent-1000 engines which are 20% more fuel efficient on a
revenue-per-kilometre basis than similar comparable legacy engine aircraft.
The Board has taken steps to reduce its own travelling and maximises the use
of virtual meetings within the Board and with all its key service providers.
SUMMARY (CONTINUED)
CORONAVIRUS ('COVID-19 ')
COVID-19 continues to have a significant impact on the airline sector, and by
extension the aircraft leasing sector. More information is provided below and
in the Asset Manager's Report.
THAI AIRWAYS INTERNATIONAL PCL ('THAI AIRWAYS' / 'THAI')
The suspension of travel due to COVID-19 in 2020 resulted in Thai Airways
entering into business rehabilitation. The Central Bankruptcy Court approved
Thai's Business Rehabilitation plan on 15 June 2021, the rehabilitation
process is currently ongoing. Please refer to the Asset Manager Report on
pages 11 to 22 for details regarding the rehabilitation process.
The Group signed a Letter of Intent ('LOI') dated 1 March 2021 with Thai
Airways under which the parties agreed to amend the lease terms that existed
then. The actual lease agreement reflecting the terms set out in the LOI was
signed on 1 April 2022. The effective date for the lease modification was 15
June 2021.
The new lease terms provided for a power by the hour ('PBH') arrangement until
31 December 2022 (with rent payable by reference to actual monthly utilisation
of the Thai aircraft and engines), with scaled back monthly fixed lease
payments thereafter until October 2026 for aircraft MSN 36110 and December
2026 for aircraft MSN 35320 reflecting reduced market rates in the long-haul
market. The lease term was extended for a further 3 years to October and
December 2029 respectively, with further scaled back monthly lease payments
starting from November 2026 and January 2027 respectively. The Extension
Period is however subject to agreement where the Group has the option to
terminate the lease early in October 2026 and December 2026 after consulting
with the Lenders. Given the uncertainty around the lease extension, the lease
terms are considered to be the period up to October and December 2026,
respectively.
A corresponding agreement was reached with the lenders as detailed below.
DEKABANK DEUTSCHE GIROZENTRALE AND TWO OTHER CONSORTIUM MEMBERS ('DekaBank')
On 6 May 2021, subsequent to the LOI being entered into by the Group and Thai
as described above, the Group and DekaBank amended and restated the existing
loan facility agreements in respect of the Thai aircraft to accommodate the
new lease terms, the First Amendment and Restatement to the Loan Agreements.
Repayments of principal were deferred until after the end of the PBH
arrangement (31 December 2022), and a new repayment schedule was to be
renegotiated close to the end of the PBH arrangement.
On 7 February 2023, the Group and DekaBank entered into a Second Amendment and
Restatement to the Loan Agreement (the 'Loan Agreement') in which the parties
agreed on the following main terms:
· the total loan amount outstanding was split into two tranches:
o Facility A is a loan of US$ 61,144,842, made up of MSN 35320 loan of US$
31,099,453 and MSN 36110 loan of US$ 30,045,389. The Facility A loan amortizes
to a combined balloon of US$ 33,947,878 and represents the scheduled debt.
o Facility B is a loan of US$ 35,504,024 (non-amortizing), made up of MSN
35320 loan of US$ 17,366,650 and MSN 36110 loan of US$ 18,137,374. The
Facility B loan will be settled as a balloon payment at the end of the loan
term in 2026.
· US$ 2.36m of surplus cash generated under the PBH period was used to
immediately repay debt on the amortizing Facility A loan in February 2023,
while an agreed cash reserve of US$ 500,000 per aircraft will be retained to
cover unforeseen costs going forward.
SUMMARY (CONTINUED)
DEKABANK DEUTSCHE GIROZENTRALE AND THREE OTHER CONSORTIUM MEMBERS ('DekaBank')
(CONTINUED)
· the interest rate swap currently in place for the scheduled debt was
dissolved at cost.
· the MSN 35320 and MSN 36110 Facility A loans bear fixed interest
rates of 6.61% and 6.89% respectively.
· the MSN 35320 and MSN 36110 Facility B loans bear fixed interest
rates of 5.26% and 5.42% respectively.
· from the monthly fixed lease rental of US$ 510,000 per aircraft
(which denotes the maximum amount the Company can earn in operations per
month), US$ 475,000 is contractually restricted so that those funds are only
payable to the lenders and US$ 35,000 per aircraft can be retained by the
company to contribute towards ongoing fixed costs of the Company.
Due to the limited liquidity position of the Group, restructuring fees
associated with the second amendment and restatement will be paid after the
eventual remarketing of the aircraft, subject to surplus sales proceeds being
realised.
IMPAIRMENT
In line with each reporting date, and market capitalisation of US$ 15.56
million at 30 June 2024, a detailed impairment assessment of the aircraft has
been undertaken. Following this review an impairment of US$ nil (31 December
2023: US$ nil) was booked against the aircraft. See note 3 for further details
regarding the impairment and comments under Highlights on page 7 regarding the
difference between net asset value and market capitalisation.
DISTRIBUTION POLICY
Under normal circumstances, the Group aims to provide shareholders with an
attractive total return comprising income, from distributions through the
period of the Company's ownership of the Assets, and capital, upon any sale of
the Assets. The Company originally targeted a quarterly distribution in
February, May, August and November of each year. The target distribution was
US$ 0.0225 per share per quarter. The dividends were targets only with no
assurance or guarantee of performance or profit forecast. Investors should not
place any reliance on such target dividends or assume that the Company will
make any distributions at all.
Due to the impact of COVID-19 on the aviation industry and therefore our
lessor, the Board suspended the payment of dividends from 3 April 2020 until
further notice. This suspension remains in place to date. Any lease rental
payments received by the Company in respect of the Thai aircraft are expected
to be applied exclusively towards the running costs of the Company and its
subsidiaries, and as a priority towards interest and principal repayments to
DekaBank. Given this backdrop the Board and its advisors feel that there is no
realistic prospect of the Company's shareholders receiving a dividend or other
distribution during the remaining lease period. The Board and its advisors
will continue to consult with shareholders in the future, with a view to
determining the best course of action to take for the future of the Company.
HIGHLIGHTS
RESULTS FOR THE PERIOD
The profit for the period ended 30 June 2024 is US$ 2,647,707 and profit per
share is US$ 0.0111. The loss for the period ended 30 June 2023 was US$
4,072,482 and loss per share was US$ 0.0170.
The results for the period ended 30 June 2024 are mainly driven by rental
income earned of US$ 4,364,612 (30 June 2023: US$ 4,340,629) and finance costs
incurred of US$ 1,982,139 (30 June 2023: US$ 7,495,940). The decrease of
finance costs is a result of an adjustment required by IFRS to reflect the
modification to the loan terms in February 2023.
Refer to page 28 for full details of results for the period.
NET ASSET VALUE ('NAV')
The NAV per share was US$ 0.18751 at 30 June 2024 (31 December 2023: US$
0.17645) and the price per share was US$ 0.065 (31 December 2023: US$ 0.0625).
NAV per share increased due to the profit made during the interim period (see
above). The NAV excluding the financial effects of the straight-lining lease
asset and the loan modification adjustment was US$ 0.15671 per share at 30
June 2024 (31 December 2023: US$ 0.16018).
The straight-lining lease asset and the loan modification adjustment will
reduce to nil over time. The NAV excluding the straight-lining lease asset and
loan modification adjustment is therefore presented to provide what the
Directors consider to be a more relevant assessment of the Group's net asset
position.
As at 30 June 2024 As at 31 December 2023
US$ US$ per share US$ US$ per share
NAV per the financial statements 44,878,141 0.18751 42,230,434 0.17645
Less: Straight-lining lease asset (8,283,322) (0.0346) (10,038,709) (0.04194)
Add: Provision on straight-lining lease asset 910,337 0.0038 1,103,254 0.00461
Add: Loan modification adjustment - - 5,042,029 0.02107
(7,372,985) (0.0308) (3,893,426) (0.01627)
Adjusted NAV 37,505,156 0.15671 38,337,008 0.16018
As at 30 June 2024, the price per share was US$ 0.065 which is significantly
lower than the NAV per share above, excluding the straight-lining lease asset
and the loan modification adjustment. The main asset in the Group, the
aircraft, have been assessed for impairment (see note 3) and found not to be
impaired. Other significant assets comprise cash and receivables whose values
are considered to be reflective of fair value due to their short-term nature.
HIGHLIGHTS (CONTINUED)
INTERIM DIVIDENDS
As previously outlined, as a result of the impact of the COVID-19 pandemic on
global aviation and particularly on its lessees; the Company suspended
dividends on 3 April 2020, until further notice to help preserve liquidity.
Further details on the impact of the COVID-19 pandemic can be found within the
Asset Manager's Report. Furthermore, in accordance with the second amended
loan agreement with DekaBank, the Group will make no dividend payments while
loan deferrals remained outstanding under the Loan Agreement.
OFFICIAL LISTING
The Company's ordinary shares were first admitted to trading on the Specialist
Fund Segment of the London Stock Exchange on 4 October 2013.
CHAIRMAN'S STATEMENT
I am pleased to present Shareholders with the Annual Report of the Group for
the period ended 30 June 2024.
The profit per share for the period was US$ 0.0111 compared to a loss per
share of US$ 0.0170 for the same period last year. The net asset value per
share at the period end was US$ 0.18751 compared to US$ 0.17645 at 31 December
2023.
IFRS requires rental income to be recognised on a straight-line basis over the
remaining lease period and consequently the accounting treatment has resulted
in some income being recognised earlier than would normally be the case. In
addition, IFRS requires a provision to be made against that lease income which
has been estimated based on recent credit reports on Thai. Please refer to
page 7 which explains the net impact of this on the profit for the period and
the NAV of US$ per share.
There has been a continued improvement in the global aviation market following
the challenges resulting from the effects of the Covid-19 (Covid) pandemic.
Recent sentiment on airline and related stocks has been more optimistic.
although airlines are struggling meeting their forecast growth numbers in an
environment of constrained new aircraft deliveries. The Ukraine war has not
had as significant impact on the industry as was expected. The same currently
applies to the conflicts in the Middle East but potential future adverse
effects remain unknown. With Covid restrictions in China being lifted there is
cause for some optimism in tourism numbers from that market going forward.
Both our aircraft, HS-TQC and HS-TQD have mainly flown in the Asian region
with regular rotations to Perth in Australia during the period. This has also
been true of the other four, Rolls Royce Trent 1000 powered 787-8 aircraft in
the Thai fleet. Sector lengths flown through the year have varied from just
under two hours (Singapore and KL) to approximately six hours (Japanese and
Australian routes). Other larger aircraft in the Thai fleet have also been
serving Asian routes which at present represent the largest passenger segment.
Under the terms of industry lease arrangements, lessee's have the right to fly
the routes which serve their needs. Shorter sector lengths do not reduce the
airlines responsibility to maintain the aircraft nor in our case to return the
aircraft at the lease term end in full life condition. Our asset manager is
responsible for liaison with Thai on all operational matters and to regularly
inspect our assets. An inspection was performed in April 2024 with no major
defects found and the aircraft being airworthy.
To participate in the uptick of passenger numbers, Thai Airways expects to
grow its fleet by about 11 aircraft in 2025. The airline´s order of 45 Boeing
787-9's underlines the expectations of further growing markets and is good
news as a reinforcement of Boeing as a core fleet constituent, however it has
opted for GE engines rather than Rolls Royce which power the current six
787-8's in their fleet (including both our aircraft). The positioning of the
smaller 787-8 within Thai's forward fleet plans is not conclusively known and
we, through our asset manager, will be seeking to clarify greater detail in
that regard.
Thai has regained profitability but operating profit excluding one-time items
declined 76% year on year to Bt1.13 billion ($32 million) in the second
quarter. Thai is looking to finalize its capital restructuring plan by the end
of 2024. In May Thailand's Ministry of Finance announced its intention to
invest another THB 12 billion (US$ 330m) in Thai by October 2024 and Thai will
seek cancellation of the business rehabilitation before resuming trading on
the stock exchange within 2Q 2025.
Our aircraft are now operating on fixed monthly lease payments with Thai until
October/December 2026 respectively, reflecting the prior negotiated reduced
lease rates. As previously noted, the lease term was extended by a further 3
years to October/December 2029, with further scaled back monthly lease
payments starting from November 2026/January 2027, and with the Group
retaining a right of early termination in October/December 2026 after
consultation with the Lenders.
The current finance arrangements with our Lenders expire at the end of 2026.
In this respect the Group can therefore (i) negotiate to extend the loans with
the existing Lenders, (ii) refinance the loans with new lenders or (iii) sell
the aircraft to an investor within a time frame until the end of 2026. Any
option has to be agreed with the current Lending group and corresponding
discussions will start in October 2024, however early discussions with the
Lenders indicate there may
CHAIRMAN'S STATEMENT (CONTINUED)
be a willingness on behalf of the Lenders to extend the arrangements until the
end of an extended lease period to October/December 2029.
The Group is also in discussions with Thai on proposals to amend the current
lease arrangements. Otherwise, by April 2025, the Group and Lenders have to
inform Thai whether or not they will execute the early termination option
under the lease. By October 2025, the Group has to provide the Lenders with
information on the steps it is taking to refinance or to remarket the aircraft
followed by a Term sheet no later than August 2026. As an ongoing obligation,
the Group has to inform the Lenders in relation to any negotiations and or
consultation with Thai regarding any restructuring of the Operating Lease
Agreement.
Whilst the situation can change, the current preferred option for the Group is
the sale of the aircraft with a lease attached which reflects improved market
terms and conditions. The current leases require the aircraft to be returned
in full life condition.
The Board and the Asset Manager remain fully committed to extracting the best
value for shareholders in this process and are focussed on actions to improve
and preserve the value of the assets. We continue to consider and review the
various options before recommending a preferred path. Necessarily this will
need to involve the proactive involvement of our lenders, advisors and our
valued lessee.
The Company believes the Boeing 787 remains an attractive asset and notes
recent transactions in the market though transparency around transaction
values is not currently available. Boeing 787 wide body production is still
behind historic levels and delayed deliveries for new aircraft are further
strengthening this demand.
The Board notes that whilst the 787 aircraft is now key to Thai, the Group's
aircraft type are the smaller 8 series and we note that all new wide bodied
aircraft Thai propose to add to their fleet are the larger 787-9 variant. The
priority of the Group will therefore be commencing discussions with Thai on
how our aircraft fit into the overall Thai fleet strategy and to what extent
existing arrangements can be enhanced for the mutual benefit of both parties.
As previously noted, there is no realistic prospect of the Company's
shareholders receiving a dividend or other distribution prior to the end of
the lease term. The key uncertainty remains the outlook for Thai, though the
position of Thai has improved considerably, the impact of inflation on the
travel industry and the knock-on effect these factors may have on aircraft
values and lease rentals.
Notwithstanding there has been some unavoidable cost increases and
inflationary pressures, with respect to ongoing working capital requirements,
the Group has been able to control the net cash burn because some service
providers have deferred certain amounts due.
In order to ensure the Group has sufficient funds to adequately finance the
period over which the Board would like to realise value for shareholders,
should an appropriate opportunity arise, the Company intends to raise
additional equity of up to $1 million in Q4 2024. A further announcement in
relation to this will be made in due course.
The Board and its advisers will continue consulting with Shareholders on an
ongoing basis. I am especially grateful to the Board and our key service
providers for their significant continued support. Finally, I would like to
thank our Shareholders for their continued support.
Jonathan Bridel
Chairman
ASSET MANAGER'S REPORT
EXECUTIVE SUMMARY
The airline market in 2024 has developed more than expected by the
International Air Transport Association (IATA) at the beginning of the year.
The Asian region, where restrictions had been lifted later, is catching up and
is expected to grow quicker than the global average, e.g. on passenger
numbers. The aviation sector is generally suffering from a reduced number of
new aircraft deliveries, which could continue for the next two to three years,
in turn limiting growth of air travel, investment volumes and market
transactions. The Rehabilitation Programme of Thai Airways is on track and the
carrier expects to exit Rehabilitation in the first half of 2025. Both
aircraft TQC and TQD owned by DP Aircraft are in regular commercial operations
with Thai Airways; the latest inspection took place in April 2024, with no
major issues found. The aircraft are mainly operating on Asia-Pacific routes,
including Perth (Australia), with the potential of other long routes such as
Brussels beginning in December 2024.
THE AVIATION MARKET
· The airline global outlook published by IATA in June 2024 showed
slightly improved numbers compared to the last forecast made in December
2023 1 (#_ftn1) :
2019 2020 2021 2022 2023 (estimated) 2024 (forecasted)
Revenues [billion USD] 838 384 513 738 908 996
Passenger Revenue [billion USD] 607 189 242 437 646 744
Net Result 26.4 - 137.7 - 40.4 - 3.5 27.4 30.5
[billion USD]
Operating Profit [billion USD] 43.2 - 110.8 - 43.5 11.2 52.2 59.9
Passenger Load Factor 83% 65% 67% 79% 82% 83%
Source: IATA "Industry Statistics: Fact Sheet June 2024"
· In June 2024, travel demand measured in RPK (Revenue Passenger
Kilometres) increased by more than 9% and the load factor by 0.5 percentage
points to 85% compared to the same month in the previous year 2 (#_ftn2)
· Global average load factor is expected to be 82.5% in 2024 which
would represent pre-Covid levels 3 (#_ftn3)
· The forecast of aircraft deliveries in 2024 had been reduced by 11%
due to ongoing supply chain issues 4 (#_ftn4)
ASSET MANAGER'S REPORT (CONTINUED)
THE AVIATION MARKET (CONTINUED)
· Fuel prices remain high and are expected to account for 31% of
airlines´ operating costs 5 (#_ftn5)
· CO2 emission per RPK decreased by 53% since 1990 resulting from
improved and new technology 6 (#_ftn6)
The Asian Airline Market
· Airlines based in Asia/Pacific announced a net profit of USD 8.8
billion in 2023 after a net loss of USD 9.7 billion in 2022 7 (#_ftn7)
· Preliminary numbers for July 2024 announced by the Association of
Asia Pacific Airlines (AAPA) state that international passengers carried by
airlines based in Asia-Pacific increased by 23% compared to the same month in
2023 reflecting about 95% of pre-Covid passenger numbers (July 2019) 8
(#_ftn8)
· Cargo demand benefits from disruptions of maritime shipping and a
strong e-commerce 9 (#_ftn9)
· According to the latest forecast by Boeing, the fleet of Chinese
airlines will annually grow by 4.1% on average and more than double within the
next 20 years 10 (#_ftn10)
· IATA expects that in 2043 about 50% of the global net passenger
increase will be contributed by the Asia Pacific region 11 (#_ftn11)
The Lessor Market
· On the one hand, lessors are suffering from delivery delays and on
the other hand they are benefitting from the resulting higher numbers of lease
extensions and increasing lease rates(( 12 (#_ftn12) ))
· Airbus and Boeing delivered 28 per cent of their July 2024 deliveries
to leasing companies, including one B787-9 and one B787-10 to ALC (Air Lease
Corporation) (( 13 (#_ftn13) ))
· The top three leasing companies regarding passenger wide-body
aircraft orders at Airbus and Boeing are Avolon (42 A330-900s), ALC (15
B787-10s, four B787-9s, four A330-900s) and AerCap (17 B787-9s, three
A330-900s) (( 14 (#_ftn14) ))
· AerCap acquired 36 aircraft of the A320neo family from Spirit´s
order book (American low-cost carrier) with the benefit of circumventing a
competitive sale and lease back process at a later stage, to have earlier
delivery slots and to acquire new assets in a time of low supply(( 15
(#_ftn15) ))
ASSET MANAGER'S REPORT (CONTINUED)
The Lessor Market (Continued)
Source: ISHKA: "Trading Update: Buyers gravitate to older assets"; 26th July
2024
Outlook & Conclusion
The global market has recovered from the pandemic apart from the Asia Pacific
region which is still slightly lacking behind pre-Covid levels. However, high
growth rates in this region are promising to outperform pre-Covid levels in
the very near future. The overall market remains adversely affected by the
shortage of new aircraft which might not change for the next two to three
years. On the one hand, the lower number of deliveries of new aircraft affects
airlines as they need to extend the aircraft utilisation lives, close lease
extensions or introduce used aircraft to fill the gaps. This in turn slows
down their fleet renewal and CO2 emission reduction plans. On the other hand,
sale and leaseback transactions of new aircraft deliveries become more and
more competitive, not only for lessors but also for financing parties who are
aiming to close transactions. Additionally, lower numbers of aircraft
deliveries results in less income for the manufacturers.
Although the current development of the airline market is showing signs of
promise, it remains vulnerable to external shocks, at least over the
near-term. While the war in Ukraine has only marginally impacted the overall
market, it has caused imbalances in relation to the competition between
European and Chinese carriers. As Chinese airlines are still flying over
Russian airspace, they are benefitting from lower costs than their European
competitors which in turn cut capacities due to economic inefficiency. Another
unknown is the potential of the Middle East conflict to geographically expand
and to further escalate.
ASSET MANAGER'S REPORT (CONTINUED)
THE LESSEE - THAI AIRWAYS INTERNATIONAL PUBLIC COMPANY LIMITED
Snapshot
· Network of 59 destinations, including 8 domestic routes, during the
second quarter of 2024 16 (#_ftn16)
· Launch of daily Brussels services on 1st December 2024 with
B787-8s 17 (#_ftn17)
· New or resumed destinations 2024: Milan (Italy), Oslo (Norway) and
Kochi (India) 18 (#_ftn18)
· The Business Rehabilitation Plan is on track
· Thai closed the first half of 2024 with a net profit, although
smaller than in the same period last year
· Foreign tourist arrivals in Thailand during the second quarter 2024
increased by 26% compared to the same quarter in 2023; nearly 80% of the
foreign tourists are form the Asia-Pacific region and tourist numbers from
China are recovering 19 (#_ftn19)
Restructuring and Rehabilitation Process: since January 2024 20 (#_ftn20)
· Debt repayment in line with the Business Rehabilitation Plan is on
track
· Agreed sales for two inactive aircraft and two engines
· Delivery of aircraft to buyer and receipt of the respective sale
prices of five aircraft from THAI fleet
· As part of the carrier´s fleet efficiency and route expansion plan,
Thai received three A350-900s, increased several frequencies (e.g. to Tokyo
and Manila) and resumed flights (to Perth and Colombo) during the first half
of 2024 21 (#_ftn21)
· Continued focus on achieving positive shareholder equity at year´s
end by completing a debt-to equity conversion and issuing new ordinary shares;
a successful capital restructuring is one of the conditions to exit Business
Rehabilitation 22 (#_ftn22)
Thai´s Financial & operational performance in brief (incl.
subsidiaries) 23 (#_ftn23)
[billion THB**] 1(st) Half 2024 1(st) Half 2023 Change Remarks*
Operating Revenues 89.94 78.89 + 14 %
- Passenger and Excess Baggage 74.61 66.10 + 13 %
- Freight and Mail 7.95 8.20 - 3 %
- Other Businesses 5.27 3.90 + 35 % a)
- Other Income 2.11 0.69 + 206 %
Operating Expenses 72.94 57.28 + 27 % b)
ASSET MANAGER'S REPORT (CONTINUED)
Thai´s Financial & operational performance in brief (incl. subsidiaries)
24 (#_ftn24) (Continued)
- Fuel and Oil 26.67 22.30 + 20 % c)
- Non-Fuel Operating Costs 46.27 34.98 + 32 % d)
Operating Result excl. One-Time Items 7.60 14.09 - 46 %
Net Result 2.72 14.78 - 82 % e)
Capacity - ASK (million) 30,639 26,505 + 16 %
Demand - RPK (million) 23,927 21,567 + 11 %
Load Factor 78.1 % 81.4 % - 3.3pp
Passengers (million) 7.68 6.87 + 12 %
Passenger Yield THB/RPK 3.11 3.05 + 2%
Aircraft Utilisation [block hours] 13.0 12.0 + 8 %
Number of Aircraft 78 74 + 5 %
Cash & Cash Equivalents [bn THB]; Jun 24 vs. Dec 23 56.26 52.94 + 6 %
Current Ratio (consolidated) 2.45 2.24 f)
**Exchange rate THB:USD as at 30th June 2024: 1.00 THB : 0.027 USD 25
(#_ftn25)
*Remarks
a) Catering, ground services, cargo handling, etc.
b) Increase in operating expenses increased more strongly than operating
revenues
c) Average fuel price in the first half of 2024 was nearly stable (up 1%)
compared to the same period in 2023
d) Crew expenses, aircraft maintenance, lease of aircraft, etc.
e) Affected by one-time expenses, particularly due to a gain on outdated
passenger ticket revenue adjustment (THB 4.14 billion; expired tickets due to
the pandemic which had not been submitted for refund), gain from debt
restructuring (THB 1.35 billion), an impairment loss of assets (THB 4.07
billion) and a loss on foreign currency exchange (THB 6.40 billion)
f) Improvement in liquidity and the ability to pay debt services
(Current Ratio = Current Assets/Current Liabilities)
ASSET MANAGER'S REPORT (CONTINUED)
Thai´s Financial & operational performance in brief (incl. subsidiaries)
26 (#_ftn26) (Continued)
Source: Cirium: "Thai Airways International Fleet Summary"; 19(th) August 2024
Source: Cirium: "Thai Airways International Fleet Summary"; 19(th) August 2024
· Second quarter 2024 27 (#_ftn27)
o Delivery of one B787-9 and three A350-900s
ASSET MANAGER'S REPORT (CONTINUED)
Thai´s Financial & operational performance in brief (incl.
subsidiaries) 28 (#_ftn28) (Continued)
o Sale of one A340-600, one B777-200 and two spare engines
· Thai Airways expects delivery of two A330-300s in November 2024 29
(#_ftn29)
· The airline intends to increase its active fleet to a size between 96
and 131 aircraft in 2033(( 30 (#_ftn30) ))
· During the fourth quarter the carrier has planned to start the
retrofit of the A320 Business Class to align the product with their
wide-bodies´ Business Class(( 31 (#_ftn31) ))
Outlook & Opportunities 32 (#_ftn32)
· Thai expects to receive 13 aircraft including five B787-9s and to
phase out two widebodies (B777-200ERs) in 2025 33 (#_ftn33)
· The carrier currently focuses on leasing rather than buying aircraft
to allow for a maximum of flexibility in upgrading and modernising its
fleet 34 (#_ftn34)
· The airline announced a reciprocal codeshare partnership with Kuwait
Airways
· The ongoing Middle East conflict has not had a significant impact on
Thai Airways as the carrier does not focus on this region; however, it is
unknown how a potential escalation might affect global trading, travelling and
the economy which in turn might hit the airline indirectly
· Thailand´s carriers are increasing their fleet, including Thai
Airways´ competitors such as Thai Air Asia, Thai Air Asia X and Thai Lion
Air 35 (#_ftn35)
· The global economy is recovering, and demand of international air
travel is increasing in the Asia Pacific region most strongly
· Thailand´s tourist numbers are expecting to increase by 26 per cent
in 2024 compared to the previous year
· In-bound travel to Thailand benefits from the extension of the Free
Visa policy for 93 countries (previously 57 countries) effective from 15th
July 2024 including China, Malaysia, India, South Korea and Laos, the top five
nationalities visiting Thailand
· The number of Indian visitors to Thailand is expected to increase by
about 0.4 million to 2.0 million in 2024 compared to the previous year;
although these numbers are still small, the Indian market has a huge potential
for continuous growth as spending money on travel and lifestyle becomes more
and more important for its young people and middle class 36 (#_ftn36)
· The number of flights between Thailand and China is expected to
increase by 126% in 2024 compared to 2023 37 (#_ftn37)
ASSET MANAGER'S REPORT (CONTINUED)
Outlook & Opportunities 38 (#_ftn38) (continued)
· Thailand is taking measurements to be prepared for growing air
traffic in the next years including the improvement of the country´s air
navigation services and opening a third runway at Bangkok Suvarnabhumi
Airport 39 (#_ftn39)
Comments & Conclusions
Although Thai Airways closed the first half of 2024 with a positive result,
expenses increased more than revenues resulting in a significant lower profit
than in the first half of 2023. This was partially caused by the depreciation
of the Thai currency as a significant percentage of airline expenses, such as
lease rates, maintenance and navigation fees, are paid in U.S. Dollar or other
currencies(( 40 (#_ftn40) )). Moreover, the carrier´s load factor decreased
compared to 2023 in an environment of overall increasing demand, pointing out
that the airline might need to better align capacity increase and passenger
demand as well as to review their route network. Apart from that, the
increased utilisation of aircraft and the resulting improvement in fleet
efficiency is an encouraging development.
The results of the Visa-free extension are promising, leading to increasing
tourist numbers visiting Thailand. Additionally, the Indian market seems
auspicious with raising numbers of Indian tourists visiting Thailand.
Therefore, it makes sense that Thai Airways is growing its Indian route
network. The airline is also increasing its number of flights to China as the
biggest market of incoming tourists. Although Thai Airways is not facing the
aforementioned routing issue like European carriers on their China routes, the
competition remains tough in this market.
Thai Airways´ recently placed order for B787 aircraft shows that the airline
intends to grow over the coming years and to retain and regain market shares.
It would be a positive development if the airline successfully concluded the
capital restructuring and exited Rehabilitation in the first half of 2025.
This would allow the carrier to be more flexible in decision making, providing
further comfort to all involved parties such as creditors and lessors. This in
turn might offer Thai Airways more options for financing their future growth.
THE ASSETS
Update Boeing 787
· Boeing delivered 43 aircraft in July 2024, reaching the first time
this year the same total of deliveries as in a corresponding month of 2023 41
(#_ftn41)
· Boeing´s July deliveries included two B787-9s and four B787-10s 42
(#_ftn42)
· Latest transactions
o March 2024
§ Japan Airlines ordered additional ten B787-9s to start joining the fleet in
2027 43 (#_ftn43)
§ El Al ordered three additional B787-9s (delivery dates in 2029 and 2030)
and placed an option for another six with the flexibility to change the
variant 44 (#_ftn44)
ASSET MANAGER'S REPORT (CONTINUED)
THE ASSETS (CONTINUED)
o April 2024
§ Lufthansa took delivery of two B787-9s leased from CALC (China Aircraft
Leasing Group) which had been operated by Bamboo Airlines (Vietnam) 45
(#_ftn45)
§ One ex-Kalair B787-9 in long term storage had been purchased by the AJW
Group (a component part and MRO provider) 46 (#_ftn46)
§ MIAT Mongolian Airlines took delivery of one B787-9 from AerCap 47
(#_ftn47)
o May 2024
§ Eva Air (Taiwan) ordered additional four B787-10s from Boeing 48 (#_ftn48)
o June 2024
§ Austrian Airlines introduced its first of eleven B787-9s to the fleet 49
(#_ftn49)
o July 2024
§ British Airways closed a leasing agreement for one B787-10 with a Japanese
leasing entity 50 (#_ftn50)
§ British Airways decided for GEnx Engines for six incoming B787s; the
carrier´s current operational B787 fleet is equipped with Rolls-Royce
engines 51 (#_ftn51)
§ Korean Air ordered 30 B787-10s and placed an option for another ten
aircraft of this variant 52 (#_ftn52)
§ JAL ordered further ten B787-9s and placed an option for additional 10
aircraft of the same model; the aircraft will be equipped with GE-engines like
the 53 B787s which the airline already operates 53 (#_ftn53)
§ Aeroméxico took delivery of one B787-9 from ALC 54 (#_ftn54)
§ Vietnam Airlines took delivery of one B787-10 from ALC 55 (#_ftn55)
o August 2024
§ ALC delivered the first of ten B787-10s to Korean Air 56 (#_ftn56)
· According to ISHKA´s August remarketing update, three B787s are
advertised 57 (#_ftn57)
· During the second half of 2023 and the first half of 2024, two used
B787s had been re-marketed according to ISHKA 58 (#_ftn58)
· Most unfilled orders for the B787 are assigned to General Electric
GEnx engines:
ASSET MANAGER'S REPORT (CONTINUED)
THE ASSETS (CONTINUED)
Source: Boeing: "Airplane Unfilled Orders": 26th August 2024
· Rolls-Royce intends to gain back market share on the Trent 1000
equipped B787s by improving the engines´ on-wing time 59 (#_ftn59) :
o a new high-pressure turbine blade - expected to be introduced in early
2025 - might double the engine time on-wing according to Rolls-Royce
o The engine manufacturer additionally develops further hot-section
improvements which might increase on-wing time by up to 30 per cent
o A retrofit could be performed during shop-visits
Assets & Operations
TQC and TQD are in regular commercial service. Their utilisation and their
respective titled engines are shown in the following tables:
AIRCRAFT OPERATIONS Thai Airways
HS-TQC HS-TQD
AIRFRAME STATUS (31(st) July 2024)
Total Flight Hours 25,773 23,550
Total Flight Cycles 6,184 5,600
ASSET MANAGER'S REPORT (CONTINUED)
Assets & Operations (Continued)
TITLED ENGINES HS-TQC HS-TQD
(31(st) July 2024)
ESN 10239 ESN 10243 ESN 10244 ESN 10248
Total Time [Flight Hours] 24,196 16,645 20,293 22,814
Total Flight Cycles 5,804 3,482 5,056 5,088
Location On-wing of TQC In-shop at SAESL for repair HS-TQE On-wing of TQD
Engine ESN 10243 was removed due to IPC Stage 8 blade damage and was inducted
into shop at the SAESL facility in Singapore on 31st January 2024.
On 23rd and 24th April 2024, the annual inspection of HS-TQD and HS-TQC
respectively had been performed at Bangkok Suvarnabhumi Airport during regular
operations. No major issues were found with the aircraft being airworthy.
Monthly lease rentals are fixed and independent from the utilisation of
Airframe and Engines.
Snapshot: Destinations of HS-TQC and HS-TQD between 21st May 2024 and 19th
August 2024
Destination Average Flight Time Frequency - TQC Frequency - TQD
Ahmedabad, India 3:46 8 10
Bengaluru, India 3:12 1 ---
Calcutta, India 2:06 2 3
Chengdu; China 2:50 12 19
Chiang Mai, Thailand 0:54 1 1
Delhi, India 3:37 --- 1
Dhaka, Bangladesh 2:03 1 1
Fukuoka; Japan 4:53 14 15
Ho Chi Minh City, Vietnam 1:10 3 2
Hong Kong 2:34 --- 3
Hyderabad, India 3:01 10 22
Islamabad, Pakistan 4:26 --- 3
Jakarta, Indonesia 2:53 3 5
Kuala Lumpur, Malaysia 1:46 10 23
Madras, India 2:52 2 8
ASSET MANAGER'S REPORT (CONTINUED)
Snapshot: Destinations of HS-TQC and HS-TQD between 21st May 2024 and 19th
August 2024 (Continued)
Manila, Philippines 2:55 --- 1
Milan, Italy 11:03 1 1
Mumbai, India 4:12 1 1
Perth; Australia 6:23 23 14
Phuket; Thailand 1:10 3 3
Rangoon, Myanmar 1:13 7 16
Singapore, Singapore 2:00 22 8
Tokyo, Japan 6:05 --- 1
Source: Flightaware; 20(th) August 2024
Asset Manager´s actions ensure asset value
As mentioned above, both aircraft were inspected by DS Aviation´s technical
staff at Bangkok Airport this April. Regular monitoring, including physical
inspections, is the top priority for DS Aviation as DP Aircraft's Asset
Manager ensuring that the Lessee is maintaining the aircraft in the best
condition per the manufacturer's and Lessor's requirements. Furthermore, DS
Aviation is dedicated to maintaining a constant exchange with Thai Airways as
it is essential to ensure a prompt exchange of updated information.
Additionally, DS Aviation continues to have an "on-demand" contract with an
on-site service provider. Their expertise and workforce are available whenever
the circumstance calls for it, ensuring prompt and efficient support on the
spot.
Comments & Conclusions
Although the quality issues impacting Boeing are mostly related to the B737MAX
family, it also affects the overall image of the company, its culture and the
number of new aircraft orders and deliveries. It will be interesting to see
how things are going to change with the newly appointed CEO Ortberg(( 60
(#_ftn60) )) and the company´s decision to buy the component supplier Spirit
AeroSystems(( 61 (#_ftn61) )). Additionally, it remains to be seen if the
improvements of the Trent 1000 engines will increase the on-wing time of the
engines as announced by Rolls-Royce. It shows that Rolls-Royce believes in
their engine as otherwise the manufacturer would probably not have invested
both cash and manpower.
The shortage of aircraft deliveries and parts´ support is expected to
continue as the number of lease extensions increases compared to prior years
(including years prior to Covid) (( 62 (#_ftn62) )). However, this situation
may change as aircraft deliveries increase or the growth rates in travel
demand flattens.
Even though airlines have shown a preference for the B787-9 and B787-10
variants, which is illustrated by the latest orders, the smaller B787-8
remains a valuable niche product as a route-opener which can be operated on
routes with lower travel demand. DS Aviation, as the funds´ asset manager,
continues to monitor the market and asset conditions closely.
DIRECTORS' INFORMATION
Jonathan (Jon) Bridel, Chairman (59), appointed 10 July 2013
Jon is a Guernsey resident and is currently a non-executive director of Fair
Oaks Income Fund Limited. Jon was previously managing director of Royal Bank
of Canada's ('RBC') investment businesses in the Channel Islands and served as
a director on other RBC companies including RBC Regent Fund Managers Limited.
Prior to joining RBC, Jon served in a number of senior management positions in
banking, specialising in credit and corporate finance and private businesses
as Chief Financial Officer in London, Australia and Guernsey having previously
worked at Price Waterhouse Corporate Finance in London.
Jon graduated from the University of Durham with a degree of Master of
Business Administration, holds qualifications from the Institute of Chartered
Accountants in England and Wales (1987) where he is a Fellow, the Chartered
Institute of Marketing and the Australian Institute of Company Directors. Jon
is a Chartered Marketer and a Member of the Chartered Institute of Marketing,
a Chartered Director and Fellow of the Institute of Directors and a Chartered
Fellow of the Chartered Institute for Securities and Investment
Jeremy Thompson, Director (69) appointed 10 July 2013
Jeremy Thompson is a Guernsey resident. He acts as a non-executive director to
a number of businesses which include three private equity funds, an investment
manager serving the listed NextEnergy Solar Fund Limited and London listed
Riverstone Energy Limited. Prior to that he was CEO of four autonomous global
businesses within Cable & Wireless PLC and earlier held CEO roles within
the Dowty Group.
Jeremy currently serves as chairman of the States of Guernsey Renewable Energy
Team and is a commissioner of the Alderney Gambling Control Commission. He is
also an independent member of the Guernsey Tax Tribunal panel. Jeremy is an
engineering graduate of Brunel (B.Sc) and Cranfield (MBA) Universities and
attended the UK's senior defence course (Royal College of Defence Studies). He
holds the Institute of Directors (IoD) Certificate and Diploma in Company
Direction and is an associate of the Chartered Institute of Arbitration. He
completed an M.Sc in Corporate Governance in 2016 and qualified as a Chartered
Company Secretary in 2017.
Harald Brauns, Director (70), appointed 1 November 2019
Harald is a German banker with extensive experience in the specialised lending
sector. He joined NORD/LB Hannover, Germany in 1977 with a first engagement in
the shipping segment. In 1985 he started the aircraft finance activities for
the bank from scratch. As the Global Head of Aircraft Finance, he built
successively a team of more than 40 dedicated aviation experts located in
Hannover, New York and Singapore. Focused on an asset-based business model
with sophisticated solutions for selected clients, he and his team advanced to
global leaders in commercial aircraft finance with an exposure of well above
US$ 10 billion split over a portfolio of 650 aircraft assets. After more than
35 years in the aviation industry Harald retired in October 2019. He is
resident in Germany and was appointed as a director of the Company with effect
from 1 November 2019.
Robert Knapp, Director (57), appointed 23 May 2024
Robert represents Ironsides Partners LLC ("Ironsides"), which has an interest
of 60,082,972 shares in the Company.
Robert is the founder and CIO of Ironsides, and is a specialist in closed-end
funds and asset value investing. Over his career he has served as a director
of numerous listed investment and operating companies. In addition to the
Company, he is a director of Barings BDC, Inc. and Okeanis Eco Tankers Corp.,
both of which are listed on the New York Stock Exchange, and Africa
Opportunity Fund Limited, which is listed on the Specialist Fund Segment of
the London Stock Exchange. Robert earned a BSc in Electrical Engineering from
Princeton University and a BA in PPE from New College, Oxford University.
STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES
Geopolitical and economic risks
The Company leases aircraft to a customer in Thailand exposing it to (i)
Thailand's varying economic, social, legal and geopolitical risks, (ii)
instability of Thailand markets and (iii) the impact of global health
pandemics and other global market disruptions. Exposure to Thailand's
jurisdiction may adversely affect the Company's future performance, position
and growth potential if Thailand's economy does not perform well or if laws
and regulations that have an adverse impact on the aviation industry are
passed in Thailand. The adequacy and timeliness of the Company's response to
emerging risks in this jurisdiction is of critical importance to the
mitigation of their potential impact on the Company.
The Geopolitical risk surrounding the Russian invasion of Ukraine and ongoing
conflict in the Middle East and the subsequent consequences have the potential
to impact travel and/or travellers' willingness to travel which in turn could
affect the volume of traffic to and from Thailand. The Thai government led by
PM Thavisin and the return from exile of former PM Thaksin provides an unknown
backdrop in terms of political stability. However, it is clear though that
tourism is a major part of the Thai economy.
Exposure to the commercial airline industry
As a supplier to and partner of the airline industry, the Group is exposed to
the financial condition of the airline industry as it leases its aircraft to
commercial airline customers. The financial condition of the airline industry
is affected by, among other things, geopolitical events, outbreaks of
communicable pandemic diseases and natural disasters, fuel costs and the
demand for air travel. To the extent that any of these factors adversely
affect the airline industry they may result in (i) downward pressure on lease
rates and aircraft values, (ii) higher incidences of lessee defaults,
restructuring, and repossessions and (iii) inability to lease aircraft on
commercially acceptable terms.
Thai Airways
Thai went into debt rehabilitation on 27 May 2020, and the business
rehabilitation plan was approved on 15 June 2021, by the Central Bankruptcy
Court of Thailand. There is risk that the business rehabilitation plan does
not achieve the desired results, and this could have an adverse impact on the
entity's lease arrangements, with Thai Airways which is the core source of
income for the Group.
Thai is under the contractual obligation to return the aircraft in full life
condition. The additional requirement to cash collateralize the obligation by
payment of Maintenance Reserves was waived in the novated lease agreement.
This leaves the company with the risk that in case of a Thai default under the
lease the aircraft may not be returned in a full life status.
In addition, the continuing impact of COVID-19 and the conflict between Russia
and Ukraine has the potential to impact Thai's business rehabilitation plan
and adversely impact the Group. This is particularly relevant for the Group
given the aircraft leased to Thai Airways are the sole source of income for
the Group.
Asset risk
The Company's Assets as at year end comprise of two Boeing 787-8 aircraft. The
Group bears the risk of selling or re-leasing the aircraft in its fleet at the
end of their lease terms or if the lease is terminated. If demand for aircraft
decreases market lease rates may fall, and should such conditions continue for
an extended period, it could affect the market value of aircraft in the fleet
and may result in an impairment charge. The Directors have engaged an asset
manager with appropriate experience of the aviation industry to manage the
fleet and remarket or sell aircraft as required to reduce and address this
risk. Any lasting impact of the COVID-19 situation on both aircraft demand and
lease rates are at present unknown.
STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES (CONTINUED)
Asset risk (Continued)
The Company's Assets as at year end comprise of two Boeing 787-8 aircraft. The
Group bears the risk of selling or re-leasing the aircraft in its fleet at the
end of their lease terms or if the lease is terminated. If demand for aircraft
decreases market lease rates may fall, and should such conditions continue for
an extended period, it could affect the market value of aircraft in the fleet
and may result in an impairment charge. The Directors have engaged an asset
manager with appropriate experience of the aviation industry to manage the
fleet and remarket or sell aircraft as required to reduce and address this
risk. Any lasting impact of the COVID-19 situation on both aircraft demand and
lease rates are at present unknown.
There is no guarantee that, upon expiry or cessation of the leases, the Assets
could be sold or re-leased for an amount that would enable shareholders to
realise a capital profit on their investment or to avoid a loss. Costs
regarding any future re-leasing of the assets would depend upon various
economic factors and would be determinable only upon an individual re-leasing
event. Potential reconfiguration costs could in certain circumstances be
substantial.
Key personnel risk
The ability of the Company to achieve its investment objective is
significantly dependent upon the advice of certain key personnel at its Asset
Manager DS Aviation GmbH & Co. KG; there is no guarantee that such
personnel will be available to provide services to the Company for the
scheduled term of the Leases or following the termination of the Lease.
However, Key Man clauses within the Asset Management agreement do provide a
base line level of protection against this risk.
Credit risk and counterparty risk
Credit risk is the risk that a significant counterparty will default on its
contractual obligations. The Group's most significant counterparty is Thai
Airways as lessee and provider of income and DekaBank Deutsche Girozentrale
('DekaBank') as holder of the Group's cash and restricted cash. The lessee
does not maintain a credit rating. Thai Airways is currently in the early
stages of implementing a rehabilitation plan. The Moody's credit rating of
DekaBank is Aa2 (2022: Aa2).
There is no guarantee that the business rehabilitation process of Thai Airways
will continue to be successful even though developments to date have been
positive. Failure of any material part of the business rehabilitation plan may
have an adverse impact on Thai's ability to comply with its obligations under
the LOI entered into during March 2021 and the subsequent amended lease
agreement entered into in 2022.
Any failure by Thai Airways to pay any amounts when due could have an adverse
effect on the Group's ability to comply with its obligations under the
DekaBank loan agreements and could result in the lenders enforcing their
security and selling the relevant Assets on the market, potentially negatively
impacting the returns to investors. Thai Airways is however an international
full-service carrier and is important to Thailand's economy and as such it is
unlikely that the government will not provide it with the necessary support to
see it through its restructure. There is no guarantee and hence a significant
risk remains.
Refinancing risk
The Group is required to present a plan for refinancing or similar to the
lenders before the expiry of the current loan facilities in the last quarter
of 2026. There is a risk that the Group will not be able to replace the
DekaBank debt obligation with new debt before the expiry of the current loan
facilities. If not able to refinance, the Group would have to dispose the
aircraft to settle the loan and there is no guarantee that the Assets could be
sold for an amount that would enable shareholders to realise a capital profit
on their investment or to avoid a loss.
STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES (CONTINUED)
Liquidity risk
In order to finance the purchase of the Assets, the Group entered into loan
agreements. Pursuant to the loan agreements, the lenders are given first
ranking security over the Assets. Under the provisions of each of the loan
agreements, the Borrowers are required to comply with loan covenants and
undertakings. A failure to comply with such covenants or undertakings may
result in the relevant lenders recalling the relevant loan. In such
circumstances, the Group may be required to remarket the relevant Asset
(either sell or enter into a subsequent lease) to repay the outstanding
relevant loan and/or re-negotiate the loan terms with the relevant lender.
With respect to working capital, the Company intends to raise additional
finance in Q4 2024 as stated in the material uncertainty related to going
concern section on page 33.
Cyber risk
The Group relies on its key third party service providers' cyber security
measures including firewalls, encryption protocols, employee training programs
and regular security assessments to safeguard the Group's data and records
from unauthorized access and harmful exploitations. The Management Engagement
Committee receives annual confirmation from all its third parties service
providers to ensure that controls over cyber security and IT infrastructure
are in place.
Boeing
The Company is exposed to Boeing being able to resolve any identified 787
related problems which the FAA or other regulatory bodies designate as
restricting commercial operations. At present no such restrictions exist. The
787 is considered a latest generation aircraft type which has pioneered areas
including the extensive use of carbon fibre in its fuselage and wing
construction.
Rolls Royce
The Company has exposure to Rolls Royce as suppliers of the Trent 1000 engines
in terms of ongoing support. Announcements by RR have implied that the
low-pressure turbine (LPT) and other known previous engine performance issues
have been resolved. The Trent 1000 is a highly fuel-efficient engine,
representing the latest engine technology. As such the Company is exposed to
any future as yet unknown performance issues. This situation is partially
mitigated by Thai using Rolls Royce Total Care and by the Asset Manager having
oversight of performance issues from both physical and desktop checks.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules ('the DTR')
of the UK's Financial Conduct Authority ('the UK FCA').
In preparing the condensed set of consolidated financial statements included
within the half-yearly financial report, the Directors are required to:
· prepare and present the condensed set of consolidated financial
statements in accordance with IAS 34 Interim Financial Reporting issued by the
International Accounting Standards Board ('IASB') and the DTR of the UK FCA;
· ensure the condensed set of consolidated financial statements has
adequate disclosures;
· select and apply appropriate accounting policies; and
· make accounting estimates that are reasonable in the circumstances.
· assess the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
The Directors are responsible for designing, implementing and maintaining such
internal controls as they determine is necessary to enable the preparation of
the condensed set of consolidated financial statements that is free from
material misstatement whether due to fraud or error.
We confirm that to the best of our knowledge:
(1) The condensed set of consolidated financial statements included within
the half-yearly financial report of DP Aircraft I Limited for the six months
ended 30 June 2024 (the 'Interim Financial Information'), which comprises
condensed consolidated statement of comprehensive income, condensed
consolidated statement of financial position, condensed consolidated statement
of cash flows, condensed consolidated statement of changes in equity and the
related explanatory notes, have been presented and prepared in accordance with
IAS 34, Interim Financial Reporting, as issued by the IASB and the DTR of the
UK FCA.
(2) The Interim Financial Information presented, as required by the DTR of
the UK FCA, includes:
a. an indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed set of
Interim Financial Statements;
b. a description of the principal risks and uncertainties for the
remaining six months of the financial year;
c. related parties' transactions that have taken place in the first
six months of the current financial year and that have materially affected the
financial position or the performance of the enterprise during that period;
and
d. any changes in the related parties' transactions described in the
last annual report that could have a material effect on the financial position
or performance of the enterprise in the first six months of the current
financial year.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Group's website.
Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions
On behalf of the Board
Director Director
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
For the six-month period ended 30 June 2024
30 June 2024 30 June 2023
(unaudited) (unaudited)
Notes US$ US$
Income
Lease rental income 4 4,364,612 4,340,629
Expenses
Asset management fees 19 (253,621) (239,709)
General and administrative expenses 5 (467,105) (609,451)
Depreciation 9 (220,391) (671,749)
Expected credit loss movement on straight lining lease asset 11 192,917 191,272
(748,200) (1,329,637)
Operating Profit 3,616,412 3,010,992
Other income 11 556,664 2,791
Finance costs 6 (1,982,139) (7,495,940)
Finance income 460,285 409,675
Net finance costs (965,190) (7,083,474)
Profit/ (Loss) before tax 2,651,222 (4,072,482)
Taxation 7 (3,515) -
Profit/(Loss) for the period 2,647,707 (4,072,482)
Total Comprehensive Income/(Loss) for the period 2,647,707 (4,072,482)
US$ US$
Profit/(Loss) per Share for the period - basic and diluted 8 0.0111 (0.0170)
All income is attributable to the Ordinary Shares of the Company.
The notes on pages 32 to 47 form an integral part of these Interim Financial
Statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
As at 30 June 2024
30 June 2024 31 December 2023
(unaudited) (audited)
Notes US$ US$
NON-CURRENT ASSETS
PPE - Aircraft & Related Components 9 123,902,191 124,122,582
Trade and other receivables 11 4,269,390 5,853,206
Restricted cash 10 16,152,413 15,735,805
Total non-current assets 144,323,994 145,711,593
CURRENT ASSETS
Cash and cash equivalents - available for use 919,240 914,505
Restricted cash 10 1,126,553 1,093,759
Trade and other receivables 11 3,621,782 3,144,163
Total current assets 5,667,575 5,152,427
TOTAL ASSETS 149,991,569 150,864,020
EQUITY
Share capital 15 211,279,828 211,279,828
Accumulated losses (166,401,687) (169,049,394)
TOTAL EQUITY 44,878,141 42,230,434
NON-CURRENT LIABILITIES
Bank borrowings 14 81,111,914 85,027,721
Maintenance provision 12 14,829,296 14,829,296
Total non-current liabilities 95,941,210 99,857,017
CURRENT LIABILITIES
Bank borrowings 14 7,882,448 7,684,502
Trade and other payables 13 1,289,770 1,092,067
Total current liabilities 9,172,218 8,776,569
TOTAL LIABILITIES 105,113,428 108,633,586
TOTAL EQUITY AND LIABILITIES 149,991,569 150,864,020
The financial statements on pages 28 to 47 were approved by the Board of
Directors and were authorised for issue on 27 September 2024. They were signed
on its behalf by:
Jonathan Bridel Jeremy Thompson
Chairman Director
The notes on pages 32 to 47 form an integral part of these Interim Financial
Statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
For the six-month period ended 30 June 2024
30 June 2024 30 June 2023
(unaudited) (unaudited)
Notes US$ US$
Profit/(Loss) for the period 2,647,707 (4,072,482)
Adjusted for:
Depreciation 9 220,391 671,749
Finance costs 6 1,982,139 7,495,940
Income tax expense/(recovery) 7 3,515 -
Provision on straight lining lease asset 11 (192,917) (191,272)
Straight-lining rental income 11 1,755,387 1,740,412
Changes in:
Increase in trade and other payables 13 195,225 95,316
(Increase)/Decrease in trade and other receivables 11 (456,273) 715,835
Income taxes paid (1,037) -
NET CASH FLOW FROM OPERATING ACTIVITIES 6,154,137 6,455,498
INVESTING ACTIVITIES
Restricted cash movement 10 (449,402) 2,765,981
NET CASH FLOW FROM INVESTING ACTIVITIES (449,402) 2,765,981
FINANCING ACTIVITIES
Bank loan principal repaid 14 (2,966,233) (6,689,862)
Bank loan interest paid 14 (2,733,767) (2,916,008)
NET CASH FLOW USED IN FINANCING ACTIVITIES (5,700,000) (9,605,870)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 914,505 1,479,541
Decrease in cash and cash equivalents 4,735 (384,391)
CASH AND CASH EQUIVALENTS AT END OF PERIOD 919,240 1,095,150
The notes on pages 32 to 47 form an integral part of these Interim Financial
Statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
For the six-month period ended 30 June 2024
Share Accumulated Total
Capital Losses Equity
US$ US$ US$
As at 1 January 2023 211,279,828 (166,543,707) 44,736,121
Total comprehensive Income for the period
Loss for the period - (2,505,687) (2,505,687)
Total Comprehensive Income - (2,505,687) (2,505,687)
As at 30 June 2023 (unaudited) 211,279,828 (169,049,394) 42,230,434
Share Accumulated Total
Capital Losses Equity
US$ US$ US$
As at 1 January 2024 211,279,828 (169,049,394) 42,230,434
Total comprehensive Income for the period
Profit for the period - 2,647,707 2,647,707
Total Comprehensive Income - 2,647,707 2,647,707
As at 30 June 2024 (unaudited) 211,279,828 (166,401,687) 44,878,141
The notes on pages 32 to 47 form an integral part of these Interim Financial
Statements.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six-month period ended 30 June 2024
1) GENERAL INFORMATION
The unaudited condensed consolidated interim financial statements (the
'Interim Financial Statements') incorporate the results of the Company and
that of wholly owned subsidiary entities DP Aircraft Guernsey III Limited, DP
Aircraft Guernsey IV Limited (collectively and hereinafter, the 'Borrowers'),
each being a Guernsey incorporated company limited by shares and one
intermediate lessor company, DP Aircraft UK Limited (the 'Lessor'), a UK
incorporated private limited company respectively. The Company and its
subsidiaries (the Borrowers and the Lessor) comprise the Group.
DP Aircraft I Limited (the 'Company') was incorporated on 5 July 2013, with
registered number 56941. The Company is admitted to trading on the Specialist
Fund Segment of the London Stock Exchange.
The Share Capital of the Company comprises 239,333,333 ordinary shares of
no-par value and one Subordinated Administrative Share of no-par value.
The Company's investment objective is to obtain income and capital returns for
its shareholders by acquiring, leasing and then, when the Board considers it
appropriate, selling aircraft.
2) SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The Interim Financial Statements for the period 1 January 2024 to 30 June 2024
have been prepared in accordance with International Accounting Standard
('IAS') 34 'Interim Financial Reporting' issued by the International
Accounting Standards Board ('IASB') and the DTR of the UK FCA.
The Interim Financial Statements do not include all the information and
disclosures required in the annual financial statements and should be read in
conjunction with the Group's annual report and consolidated financial
statements for the year ended 31 December 2023. The Group's annual financial
statements for the year ended 31 December 2023 have been prepared in
accordance with International Financial Reporting Standards ('IFRS') issued by
the IASB and are available on the Company's website or from the Company
Secretary.
The Interim Financial Statements have been prepared on the basis of the
accounting policies set out in the Group's annual consolidated financial
statements for the year ended 31 December 2023 but also taking into account
any new policies that will be applied in the Group's annual consolidated
financial statements for the year ended 31 December 2024.
The Directors have concluded that there are no new standards, amendments to
standards and interpretations that are effective for annual periods beginning
on 1 January 2024 which have a material impact on the Interim Financial
Statements.
These are unaudited non-statutory interim financial statements and they have
not been reviewed by the auditors. The last audited statutory financial
statements were issued on 25 April 2024 in respect of the year ended 31
December 2023.
These unaudited condensed consolidated Interim Financial Statements as at and
for the six-month period ended 30 June 2024, have not been reviewed or audited
by the Group's auditor.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
2) SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Material uncertainty relating to going concern
The Directors believe that it is appropriate to prepare these consolidated
financial statements on a going concern basis as the current cash flow
forecasts demonstrate that the Group, with continued deferral of fees, as
outlined below, from some service providers, has sufficient cash to cover
operating costs for a period of at least twelve months from the signing of the
consolidated financial statements (the "going concern period").
Should a plausible downside scenario occur additional finance will be required
to provide sufficient funding to fund the Group's activities to cover any
negotiations with the lenders as further detailed below. In this respect the
Company believes it is therefore prudent to raise additional capital in Q4
2024. The Board will consult with its broker regarding a proposed capital
raise and its uptake. However, the outcome is currently uncertain.
The Board therefore concludes that to sufficiently cover off all going concern
scenarios, there is a material uncertainty, however it remains appropriate to
prepare the financial statements on a going concern basis.
In making this conclusion, the Board have taken into consideration:
· that Thai Airways have made monthly fixed lease rental payments on
time and in full from the start of the revised fixed rental period commencing
in January 2023. Further that Thai have reported a consistent return to
profitability and have projected that they could exit their formal
rehabilitation Period in Q2 2025;
· that given Thai Airways improved performance the Company will
continue to receive US$ 35,000 per aircraft per month as a contribution
towards its operating costs with the rest going towards the pay down of the
Group's outstanding loan arrangements;
· the continued deferral of some fees by the Board, the Asset Manager
and the Broker as noted in note 13;
· successfully raising up to US$ 1m in Q4 2024 to allow the Group to
trade beyond the going concern period to facilitate negotiating (i) an
extension to the current loan maturities beyond the expiring loan terms in Q4
2026 with the Lenders, and (ii) an enhancement of the terms and conditions of
the leases with Thai Airways, noting that negotiations with the lenders will
commence in late 2024; and
· as a matter of prudence, the Company will need to consider costs
associated with the winding up of the Group should it be required.
3) SIGNIFICANT JUDGEMENTS AND ESTIMATES
The preparation of unaudited condensed consolidated Interim Financial
Statements in compliance with IAS 34 requires management to make judgements,
estimates and assumptions about the carrying amount of assets and liabilities
that are not readily apparent from their sources.
Information about assumptions and estimation uncertainty at 30 June 2024, that
have a significant risk of resulting in a material adjustment to the carrying
amounts of assets and liabilities in the Interim Financial Statements for the
period are:
Significant estimates
Impairment of property, plant and equipment
As with each reporting date but more relevant in light of the developments of
COVID-19, a detailed impairment assessment of the aircraft has been
undertaken.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
3) SIGNIFICANT JUDGEMENTS AND ESTIMATES (CONTINUED)
Significant estimates (continued)
Impairment of property, plant and equipment (continued)
IFRS requires an assessment of the aircraft carrying value versus the
recoverable amount i.e., the higher of the value in use and fair value less
cost to sell. In considering the impairment of the Thai aircraft, the Board
concluded that the fair value less costs to sell was the recoverable amount.
The fair value less costs to sell used in the assessment is based on the
full-life market value of each aircraft as determined by two independent
appraisers given the aircraft have a lease with a contractual full-life return
condition attached to them. The Board considered it appropriate not to apply
any discounts and adjustments for these aircraft given the specific
circumstances of these aircraft.
The Board considered all possible valuation ranges and concluded that the Thai
aircraft were not impaired as at 30 June 2024, given the fair value less costs
to sell was greater than the book value of the aircraft. Two independent
appraisers determined that the full life market value of the aircraft as at 30
June 2024 ranged from US$ 59.8mil to US$ 74.5 mil. It should be noted that
each appraiser will have its own opinion of the market and how the market may
develop. On a specific aircraft type, one appraiser might be more optimistic
compared to another provider and vice versa. In addition, appraisers obtain
their market information from various sources and use different calculation
models. This may have influence on future and current market values, hence the
wide range. Therefore, there is no absolute estimate of future and current
market values. In order to minimise variance in estimates an average of the
two appraisals is used in determining market values for the aircraft. This
approach is consistent with the approach adopted by other market participants
(lessors, lenders, etc) and is consistent with prior periods. Given the nature
and life of the Company's aircraft this approach is considered to be
reasonable. The average market value, less selling costs for each aircraft, is
more than each aircraft's carrying value. Therefore, no impairment loss has
been recognised during the financial period ended 30 June 2024 (31 December
2023: US$ nil).
The Board also considered if there was any indication that the accumulated
impairment recognised in previous years on the aircraft of US$ 58,839,697 had
reversed partially or in full. The Board has concluded that based on the
possible ranges of the aircraft valuations, there was no reversal during the
period ended 30 June 2024.
The aircraft are currently in a half-life state which means the airframe,
engines, landing gear and other major time/cycle limited components are
halfway through their various overhaul and /or life cycles. Note that the
aircraft will be returned in a full-life condition on termination of the
leases hence full-life market value was used in the impairment assessment.
Depreciation of aircraft
The Group depreciates the Assets on a straight-line basis over the remaining
lease life, taking into consideration the estimated residual value at the end
of the lease term. The Group engages independent expert valuers (appraisers)
each year to provide a valuation of the Assets and take into account the
average of the valuations provided.
Residual value estimates of the Assets were determined by the full life
inflated base values at the end of the leases, from external valuations and
discounted by the inflation rate incorporated into those valuations.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
3) SIGNIFICANT JUDGEMENTS AND ESTIMATES (CONTINUED)
The full life inflated base value is the appraiser's opinion of the underlying
economic value of the aircraft in an open, unrestricted, stable market
environment with a reasonable balance of supply and demand and assumes full
consideration of its 'highest and best use'. The full life inflated values
used within the financial statements match up the two lease termination dates
(October 2026 and December 2026) and have been discounted by the inflation
rate incorporated into the valuations. The residual value of the aircraft does
not represent the current fair value of the aircraft.
The residual value estimates at the end of each year are used to determine the
aircraft depreciation of future periods. The residual value estimates of the
leases for the aircraft as at 31 December 2023 was US$ 120,247,389
(31 December 2023: US$ 122,852,389) and carrying value as at 31 December 2023
was US$ 124,122,582 (31 December 2023: US$ 125,466,080).
4) LEASE RENTAL INCOME
30 June 2024 30 June 2023
(unaudited) (unaudited)
US$ US$
Straight lining rental income 4,364,612 4,340,629
Total lease rental income 4,364,612 4,340,629
All lease rental income was derived from Thai Airways and the related two
Boeing 787-8 aircraft leased to them.
Lease payments are fixed at US$ 510,000 per month until October and December
2026 respectively for each lease.
The lease term was extended by three years to October 2029 for aircraft MSN
36110 and December 2029 for aircraft MSN 35320 (the 'Extension Period') with
further scaled back monthly lease payments starting from November 2026 and
January 2027 respectively. The Extension Period is however subject to an early
termination option in 2026 if the Group after consulting its lenders decides
to do so. The lease term has been determined to be the period to October 2026
and December 2026 respectively which is the non-cancellable term of each
aircraft lease.
The contractual fixed future lease rentals to be received under
non-cancellable operating leases effective as at the reporting date are:
Boeing 787-8 Boeing 787-8 Total
Serial No: 35320 Serial No: 36110
30 June 2024 US$ US$ US$
< 1 year 6,120,000 6,120,000 12,240,000
1 to 2 years 6,120,000 6,120,000 12,240,000
2 to 3 years 2,698,065 2,007,097 4,705,162
3 to 4 years - - -
4 to 5 years - - -
>5 years - - -
14,938,065 14,247,097 29,185,162
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
4) LEASE RENTAL INCOME (CONTINUED)
30 June 2023 Boeing 787-8 Boeing 787-8 Total
Serial No: 35320 Serial No: 36110
US$ US$ US$
< 1 year 6,120,000 6,120,000 12,240,000
1 to 2 years 6,120,000 6,120,000 12,240,000
2 to 3 years 6,120,000 6,120,000 12,240,000
3 to 4 years 2,698,065 2,007,097 4,705,162
4 to 5 years - - -
>5 years - - -
21,058,065 20,367,097 41,425,162
5) GENERAL AND ADMINISTRATIVE EXPENSES
30 June 2024 30 June 2023
(unaudited) (unaudited)
US$ US$
Administration fees 114,068 121,307
Aircraft agency fees - 5,523
Aircraft security trustee fees 5,971 7,047
Aircraft valuation fees - 5,089
Audit fees 86,546 37,171
Company broker fees 83,950 83,951
Directors' fees and expenses 102,600 100,242
Foreign exchange losses 4,374 20,634
Insurance costs 34,864 46,174
IT and printing costs 4,596 10,664
Legal fees - 5,194
Miscellaneous costs 3,626 11,511
Registrar fees 11,229 9,545
Regulatory fees 6,060 3,307
Restructuring fees in relation to Thai and loan agreement 2,014 142,092
Tax advice fees 7,207 -
Total general and administrative expenses 467,105 609,451
6) FINANCE COSTS
30 June 2024 30 June 2023
(unaudited) (unaudited)
US$ US$
Loan interest 1,982,139 2,453,911
Modification adjustment - 5,042,029
Total finance costs 1,982,139 7,495,940
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
6) FINANCE COSTS (CONTINUED)
During the period there was a restructure of the loans advanced by DekaBank.
Management, in line with IFRS 9, assessed whether the modification was
substantial or not. The assessment was done on a quantitative basis and
compared the net present value of the modified cash flows per the amended loan
terms including any fees payable or receivable, discounted at the original
effective interest rate, against the carrying value of the loans prior to the
modification. A difference of 10% or more would have been considered
substantial as is advised in IFRS 9. Management concluded that the
modification was not substantial, and a modification adjustment, being the
difference between the net present value of the cash flows under the revised
terms discounted at the original agreement's effective interest rate and the
carrying value of the loans immediately prior to the modification, was made to
the existing loan in line with IFRS 9. This totalled US$ 5,042,029 and
increased both finance costs and the loans payable at the point of
modification. This adjustment essentially recognises a loss now due to the
less favourable terms (primarily interest rate increases) under the modified
terms compared to the original terms. As a result of this adjustment, interest
will be recognised at the lower original effective interest rate as opposed to
the higher modified interest rate going forward.
7) TAXATION
With the exception of DP Aircraft UK Limited, all companies within the Group
are exempt from taxation in Guernsey and are charged an annual exemption fee
of £1,600 each (2023: £1,200).
DP Aircraft UK Limited is subject to taxation at the applicable rate in the
United Kingdom. The tax rebate during the period ended 30 June 2024 was US$
3,515 (period 1 January 2023 to 30 June 2023: US$ nil). The Directors do not
expect the taxation payable or refundable to be material to the Group.
A tax reconciliation has not been presented in these Interim Financial
Statements as the effective tax rate of 0.00% (30 June 2023: (0.00%)) is not
material and the reconciliation is not relevant to the understanding of the
Company's results for the period end.
8) PROFIT/(LOSS) PER SHARE
30 June 2024 30 June 2023
(unaudited) (unaudited)
US$ US$
Profit/ (Loss) for the period 2,647,707 (4,072,482)
Weighted average number of shares 239,333,333 239,333,333
Profit/(Loss) per share 0.0111 (0.0170)
There are no instruments in issue that could potentially dilute earnings per
ordinary share in future periods.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
9) PROPERTY, PLANT & EQUIPMENT - AIRCRAFT & RELATED
COMPONENTS
Aircraft Lease Premium Total
30 June 2024 (unaudited) (unaudited) (unaudited)
US$ US$ US$
COST
As at 1 January 2024 and 30 June 2024 238,731,161 17,398,493 256,129,654
ACCUMULATED DEPRECIATION
As at 1 January 2024 55,768,882 8,200,047 63,968,929
Charge for the period 220,391 - 220,391
As at 30 June 2024 55,989,273 8,200,047 64,189,320
IMPAIRMENT
As at 1 January 2024 58,839,697 9,198,446 68,038,143
Charge for the period - - -
As at 30 June 2024 58,839,697 9,198,446 68,038,143
CARRYING AMOUNT
As at 30 June 2024 123,902,191 - 123,902,191
Aircraft Lease Premium Total
31 December 2023 (audited) (audited) (audited)
US$ US$ US$
COST
As at 1 January 2023 and 31 December 2023 238,731,161 17,398,493 256,129,654
ACCUMULATED DEPRECIATION/AMORISATION
As at 1 January 2023 54,425,384 8,200,047 62,625,431
Charge for the period 1,343,498 - 1,343,498
As at 31 December 2023 55,768,882 8,200,047 63,968,929
IMPAIRMENT
As at 1 January 2023 58,839,697 9,198,446 68,038,143
Charge for the period - - -
As at 31 December 2023 58,839,697 9,198,446 68,038,143
CARRYING AMOUNT
As at 31 December 2023 124,122,582 - 124,122,582
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
9) PROPERTY, PLANT & EQUIPMENT - AIRCRAFT & RELATED
COMPONENTS (CONTINUED)
As at period end PPE is comprised of two aircraft leased to Thai Airways.
Under the terms of the leases that existed during the period, the cost of
repair and maintenance of the Assets is to be borne by Thai Airways and Thai
Airways has a contractual obligation to return the Assets in a full life
condition. However, after expiry or termination of the leases with Thai, the
cost of repair and maintenance will fall upon the Group. Therefore, after
expiry or termination of the Thai leases, the Group may bear higher costs and
the terms of any subsequent leasing arrangements (including terms for repair,
maintenance and insurance costs relative to those agreed under the leases) may
be less favourable, which could reduce the overall distributions paid to the
shareholders.
Refer to note 3 for details regarding residual value estimates. The Group
depreciates the aircraft on a straight-line basis over the remaining lease
term. The lease term has been determined to end in 2026.
As detailed in note 3, as at 30 June 2024, there is no impairment to the
aircraft and there are no indications of reversal of prior year impairments
either. Refer to note 3 for further details.
The loans entered into by the Group to complete the purchase of the two
aircraft are cross collateralised. Each of the loans are secured by way of
security taken over each of the two aircraft.
10) RESTRICTED CASH
30 June 2024 31 December 2023
(unaudited) (audited)
US$ US$
Non-current assets
Maintenance reserves 16,152,413 15,735,805
16,152,413 15,735,805
Current assets
Security deposit accounts 99 97
Lease rental accounts 1,126,454 1,093,662
1,126,553 1,093,759
Total restricted cash 17,278,966 16,829,564
Maintenance reserves held, are to be used solely to cover costs related to the
maintenance of the two aircraft. Effective 15 June 2021, the Group no longer
receives maintenance reserves contributions from the lessee in line with the
updated lease terms.
The majority of security deposits were transferred to Lease Rental Accounts
during the prior period and are being used to service loan payments due to
DekaBank in accordance with the DekaBank financing arrangements. Monies
received into the Lease Rental Accounts during the fixed rent period are to be
transferred into Borrower Rental Accounts and applied in a specific manner as
agreed between DekaBank and the Group. Access to the Lease Rental Accounts,
Security deposit accounts and Maintenance reserves accounts is physically
restricted by DekaBank therefore these monies are classified as restricted
cash.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
11) TRADE AND OTHER RECEIVABLES
30 June 2024 31 December 2023
(unaudited) (audited)
US$ US$
Prepayments 34,095 61,914
Straight-lining lease asset 8,283,322 10,038,709
Debtor due from Thai- Maintenance reserve 484,092 -
Total trade and other receivables 8,801,509 10,100,623
Less: Expected credit loss on straight lining lease asset (910,337) (1,103,254)
Net trade and other receivables 7,891,172 8,997,369
Current and non-current split as at year end is as follows:
30 June 2024 31 December 2023
Current assets (unaudited) (audited)
US$ US$
Prepayments 34,095 61,914
Straight-lining lease asset 3,103,595 3,082,249
Debtor due from Thai- Maintenance reserve 484,092 -
3,621,782 3,144,163
Non-current assets
Straight-lining lease asset 4,269,390 5,853,206
Trade and other receivables 7,891,172 8,997,369
The Group has assessed the straight-lining lease asset for impairment. This
balance represents the result of straight-lining of future fixed lease
payments over the lease term. The Group has performed an assessment on the
rent receivable and the straight-lining lease asset taking into account
current and future information relating to the airline industry as well as the
lessee specifically and concluded that the impairment provision as at 30 June
2024 is US$ 910,337 (31 December 2023: US$ 1,103,254).
Debtors due from Thai-Maintenance reserve amounting to £484,092 along with
other income amount in the statement of comprehensive Income amounting to
£556,664 is in relation to the recovered maintenance reserves from Thai
Airways. It has been agreed that these payments started in June 2024 and will
continue every 6 months up to 2027. The receivable has been recognised in full
from June 2024, the impact of discounting on this receivable is immaterial and
has therefore, not been adjusted for in the financial statements.
Movements in the impairment provision for trade receivables are as follows:
30 June 2024 31 December 2023
(unaudited) (audited)
US$ US$
Opening provision 1,103,254 1,486,453
Expected credit loss on straight lining lease asset (192,917) (383,199)
Expected credit loss on lease receivable - -
Lease receivable written off - -
Closing provision 910,337 1,103,254
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
12) MAINTENANCE PROVISION
The maintenance reserves liability relates to funds received from Thai Airways
reserved for covering the cost of maintenance. Effective 15 June 2021, the
Group no longer receives maintenance reserves contributions from the lessee in
line with the updated lease terms.
13) TRADE AND OTHER PAYABLES
30 June 2024 31 December 2023
(unaudited) (audited)
US$ US$
Current
Accruals and other payables 256,027 255,581
Asset Manager fees payable 419,751 283,011
Broker fees payable 381,698 321,809
Director fees payable 223,256 225,105
Taxation payable 9,038 6,560
Total trade and other payables 1,289,770 1,092,066
All directors, brokers fees and most of the asset manager fees have been
classified as current liabilities under IFRS but these creditors have agreed
the amounts are not payable within twelve months unless there is an asset
sale.
14) BANK BORROWINGS
30 June 2024 31 December 2023
(unaudited) (audited)
US$ US$
Current liabilities: bank interest payable and bank borrowings (7,882,448) (7,684,502)
Non-current liabilities: bank borrowings (81,111,914) (85,027,721)
Total liabilities (88,994,362) (92,712,223)
The borrowings are repayable as follows:
30 June 2024 31 December 2023
(unaudited) (audited)
US$ US$
Interest payable 162,502 183,992
Within one year 7,719,946 7,500,510
In two to five years 81,111,914 85,027,721
After five years - -
Total bank borrowings 88,994,362 92,712,223
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
14) BANK BORROWINGS (CONTINUED)
The table below analyses the movements in the Group's bank borrowings:
30 June 2024 31 December 2023
(unaudited) (audited)
US$ US$
Opening balance 92,528,231 98,304,863
Loan modification adjustment (Note 6) - 5,042,029
Repayment of loan (2,966,233) (9,556,363)
Amortisation adjustment (730,138) (1,262,298)
Principal bank borrowings 88,831,860 92,528,231
Interest payable 162,502 183,992
Total bank borrowings 88,994,362 92,712,223
The tables below sets out an analysis of net debt and the movements in net
debt for the period ended 30 June 2024:
Cash and cash equivalents
US$ Principal Interest Net Debt
US$ US$ US$
At 1 January 2024 914,505 (92,528,231) (183,992) (91,797,718)
Cash flows 4,735 2,966,233 2,733,767 5,704,735
Non cash:-
Modification adjustment - - - -
Amortisation adjustment - 730,138 (730,138) -
Interest charge - - (1,982,139) (1,982,139)
At 30 June 2024 919,240 (88,831,860) (162,502) (88,075,122)
The tables below sets out an analysis of net debt and the movements in net
debt for the year ended 31 December 2023:
Cash and cash equivalents Principal Interest Net Debt
US$ US$ US$ US$
At 1 January 2023 1,479,541 (98,304,863) (181,493) (97,006,815)
Cash flows (565,036) 9,556,363 5,769,445 14,760,772
Non cash: - - (5,042,029) - (5,042,029)
Modification adjustment
Amortisation adjustment - 1,262,298 (1,262,298) -
Interest charge - - (4,494,653) (4,494,653)
Loan arrangement fee - - (14,993) (14,993)
At 31 December 2023 914,505 (92,528,231) (183,992) (91,797,718)
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
14) BANK BORROWINGS (CONTINUED)
DekaBank Deutsche Girozentrale
During the year ended 31 December 2015, the Company utilised the proceeds from
the placing and the proceeds of two separate loans from DekaBank Deutsche
Girozentrale ('DekaBank') of US$ 78,500,000 each to fund the purchase of two
Boeing 787-8 aircraft. The balance on the loans at 30 June 2024 was US$
88,994,362 (31 December 2023: US$ 92,712,223).
On 6 May 2021, subsequent to the LOI being entered into by the Group and Thai
as described in the summary in page 4, the Group and DekaBank amended and
restated the existing loan facility agreements in respect of the Thai aircraft
to accommodate the new lease terms, First Amendment and Restatement to the
Loan Agreements. Repayments of principal were deferred until after the end of
the PBH arrangement (31 December 2022), and a new repayment schedule was to be
renegotiated close to the end of the PBH arrangement.
On 7 February 2023, the Group and DekaBank entered into a Second Amendment and
Restatement to the Loan Agreement (the 'Loan Agreement') in which the parties
agreed on the following main terms:
· the total loan amount outstanding was split into two tranches:
o Facility A is a loan of US$ 61,144,842, made up of MSN 35320 loan of US$
31,099,453 and MSN 36110 loan of US$ 30,045,389. The Facility A loan amortizes
to a combined balloon of US$ 33,947,878 and represents the scheduled debt.
o Facility B is a loan of US$ 35,504,024 (non-amortizing), made up of MSN
35320 loan of US$ 17,366,650 and MSN 36110 loan of US$ 18,137,374. The
Facility B loan will be settled as a balloon payment at the end of the loan
term in 2026.
· US$ 2.36m of surplus cash generated under the PBH period was used
to immediately repay debt on the amortizing Facility A loan in February 2023,
while an agreed cash reserve of US$ 500,000 per aircraft will be retained to
cover unforeseen costs going forward.
· the interest rate swap currently in place for the scheduled debt
was dissolved at cost.
· the MSN 35320 and MSN 36110 Facility A loans bear fixed interest
rates of 6.61% and 6.89% respectively.
· the MSN 35320 and MSN 36110 Facility B loans bear fixed interest
rates of 5.26% and 5.42% respectively.
· from the monthly fixed lease rental of US$ 510,000 per aircraft
(which denotes the maximum amount the Company can earn in operations per
month), US$ 475,000 is contractually restricted so that those funds are only
payable to the lenders and US$ 35,000 per aircraft can be retained by the
company to contribute towards ongoing fixed costs of the Company.
The MSN 35320 loan and the MSN 36110 loan have a final maturity date of 9
December 2026 and 29 October 2026 respectively.
Due to the limited liquidity position of the Group, restructuring fees
associated with the second amendment and restatement will be paid after the
eventual remarketing of the aircraft, subject to surplus sales proceeds being
realised. While there are covenants attached to the loans, there has been no
issues of non-compliance within the period.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
15) SHARE CAPITAL
Period ended 30 June 2024 (unaudited) Subordinated
Administrative Ordinary
Share Shares Total
Issued and fully paid (no par value): Number Number Number
Shares as at 1 January 2024 and 30 June 2024 1 239,333,333 239,333,334
US$ US$ US$
Share capital as at 1 January 2024 and 30 June 2024 1 211,279,827 211,279,828
Period ended 30 June 2023 (unaudited) Subordinated
Administrative Ordinary
Share Shares Total
Issued and fully paid (no par value): Number Number Number
Shares as at 1 January 2023 and 30 June 2023 1 239,333,333 239,333,333
US$ US$ US$
Share capital as at 1 January 2023 and 30 June 2023 1 211,279,827 211,279,828
Subject to the applicable company law and the Company's Articles of
Incorporation, the Company may issue an unlimited number of shares of par
value and/or no-par value or a combination of both. The Subordinated
Administrative Share is held by the Asset Manager.
Holders of Subordinated Administrative Shares are not entitled to participate
in any dividends and other distributions of the Company. On a winding up of
the Company the holders of the Subordinated Administrative Shares are entitled
to an amount out of the surplus assets available for distribution equal to the
amount paid up, or credited as paid up, on such shares after payment of an
amount equal to the amount paid up, or credited as paid up, on the ordinary
shares to the shareholders. Holders of Subordinated Administrative Shares
shall not have the right to receive notice of and have no right to attend,
speak and vote at general meetings of the Company except if there are no
ordinary shares in existence.
The Directors are entitled to issue and allot C Shares. No C Shares have been
issued since the Company was incorporated.
16) DIVIDENDS
There were no dividends declared and paid during the period ended 30 June 2024
and 30 June 2023.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
17) FAIR VALUE MEASUREMENT
Financial assets and financial liabilities at amortised cost
The fair value of cash and cash equivalents, trade and other receivables,
restricted cash and trade and other payables approximate their carrying
amounts due to the short-term maturities of these instruments.
18) RELATED PARTY TRANSACTIONS
The Directors of the Company received total fees from the Group as follows:
Current fee 30 June 2024 30 June 2023
(annual) (unaudited) (unaudited)
£ US$ US$
Jon Bridel (Chairman) 61,750 39,005 38,481
Jeremy Thompson (Chairman of the Audit and Risk Committee and Senior
Independent Director)
49,450 31,236 30,483
Harald Brauns (Chairman of the
Management Engagement Committee) 49,450 31,230 31,278
Robert Knapp - - -
Total 160,650 101,471 100,242
*Note: Directors fees were agreed in GBP, the financial statements
are presented in US$
Up to 30 September 2022, 10% of base fees and all extra fees were being
deferred to be settled in the future via cash or by way of issue of equity of
the Company or both.
Directors' expenses totalling US$ 1,129 were paid during the period ended 30
June 2024 (30 June 2023: US$ 1,213), with US$ nil due to be paid at the
year-end (31 December 2023: US$ nil).
Robert Knapp was appointed with effect from 23 May 2024, he will not receive
any fees but is able to claim for any expenses incurred in relation to DP
Aircraft up to $15,000 per annum.
The Directors' interests in the shares of the Company are detailed below:
30 June 2024 31 December 2023
Number of Number of
ordinary shares ordinary shares
Robert Knapp via Ironsides 60,082,972 -
Jon Bridel and connected persons 90,000 90,000
Jeremy Thompson 15,000 15,000
Harald Brauns - -
19) MATERIAL CONTRACTS
Asset Management Agreement
The Asset Management Agreement dated 19 September 2013, between the Company
and DS Aviation was initially amended on 5 June 2015 to reflect the
acquisition of two new aircraft. A second amendment via a side letter,
effective 1 January 2021, was made to the Asset Management Agreement on 7 May
2021.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
19) MATERIAL CONTRACTS (CONTINUED)
Disposal fee
The initial amendment provides a calculation methodology for the disposal fee
which will only become payable when all four of the Assets (two sold under
receivership in the prior period and second two currently held by the Group)
have been sold after the expiry of the second Thai Airways lease on 9 December
2026.
The fee will be calculated as a percentage of the aggregate net sale proceeds
of the four Assets, such percentage rate depending upon the Initial Investor
Total Asset Return per share being the total amount distributed to an initial
investor by way of dividend, capital return or otherwise over the life of the
Company. If each of the Assets is sold subsequent to the expiry of their
respective leases, the percentage rate shall be:
· Nil, if the Initial Investor Total Asset Return per Share is less
than 205%;
· 1.5%, if the Initial Total Asset Return per Share equals or
exceeds 205% but is less than 255%;
· 2%, if the Initial Total Asset Return per Share equals or exceeds
255% but is less than 305%; or
· 3%, if the Initial Total Asset Return per Share equals or exceeds
305%.
In the event that any of the Assets is sold prior to the expiry of its lease
the percentage hurdles set out above will be adjusted on the following basis:
(i) an amount will be deducted in respect of each Asset sold prior to
the expiry of its lease, equal to the net present value of the aggregate
amount of dividends per share that were targeted to be paid but were not paid
as a result of the early divestment of the relevant Asset; and
(ii) a further amount will be deducted, in respect of each Asset sold
prior to the expiry of its lease, equal to the amount by which the proportion
of the non-dividend component of the relevant percentage hurdle attributable
to the relevant Asset would need to be reduced in order to meet its net
present value.
Per the second amendment, payment of any Disposal Fee per above (if any) in
connection with the sale of any of the Assets is subordinated to the DekaBank
loans and will only become payable after the loans (including the deferred
element) have been repaid or prepaid in full.
The disposal fee is a cash-settled payment to the Asset Manager. There is no
disposal fee expected to be payable and hence no provision recognised within
these Interim Financial Statements.
Management fees
The Asset Manager is paid a monthly base fee of US$ 15,085 (US$ 16,666 up to
31 December 2020) per Asset in respect of the two Assets that are currently
held by the Group, increasing by 2.5 per cent per annum from May 2021.
As consideration for the Asset Manager agreeing to a reduction of the monthly
base fee in respect of the two Assets that are currently held by the Group,
the Company agreed that, when permissible as advised by the corporate broker,
the Asset Manager shall receive an allocation of shares in the Company
determined to be of a value equivalent to the reduction in the monthly base
fee with respect to the two Assets. The share allocation will be carried out
using a share price for the conversion which is fair and reasonable as advised
by corporate broker.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six-month period ended 30 June 2024
19) MATERIAL CONTRACTS (CONTINUED)
Management fees (Continued)
In the period to 30 June 2024 asset management fees totalled US$ 253,621 (30
June 2023 US$ 239,709) and US$ 419,751 was due as at 30 June 2024 (31
December 2023: US$ 29,998). As discussed in note 13, the amounts due are not
payable within twelve months unless there is an asset sale.
20) SEGMENTAL INFORMATION
The Group is engaged in one operating segment, being acquiring, leasing and
subsequent selling of aircraft. The geographical location of the Assets of the
Group is Thailand, where the Assets are registered. The income arising from
the lease of the Assets originates from a lessee based in Thailand.
21) SUBSEQUENT EVENTS
There are no relevant subsequent events to disclose during the period.
COMPANY INFORMATION
Directors Jonathan Bridel
Jeremy Thompson
Harald Brauns
Robert Knapp
Registered Office East Wing
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3PP, Channel Islands
Asset Manager DS Aviation GmbH & Co. KG
Stockholmer Allee 53
44269 Dortmund, Germany
Solicitors to the Company Norton Rose Fulbright LLP
(as to English law) 3 More London Riverside
London
SE1 2AQ, United Kingdom
Advocates to the Company Mourant Ozannes
(as to Guernsey law) Royal Chambers
St Julian's Avenue
St Peter Port
Guernsey
GY1 4HP, Channel Islands
Auditor KPMG Channel Islands Limited
Glategny Court
Glategny Esplanade
St Peter Port
Guernsey
GY1 1WR, Channel Islands
Administrator and Company Secretary Aztec Financial Services (Guernsey) Limited
East Wing
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3PP, Channel Islands
Corporate Broker Investec Bank Plc
30 Gresham Street
London
EC2V 7QN, United Kingdom
1 (#_ftnref1) IATA: "Willie Walsh's Report on the Air Transport Industry at
the 80th IATA AGM"; 3rd June 2024 // IATA: "Airline Profitability Outlook
Improves for 2024"; 3rd June 2024
2 (#_ftnref2) IATA: "Passenger Demand Up 9.1% in June"; 31(st) July 2024
3 (#_ftnref3) IATA: "Airline Profitability Outlook Improves for 2024"; 3(rd)
June 2024
4 (#_ftnref4) IATA: "Willie Walsh's Report on the Air Transport Industry at
the 80th IATA AGM"; 3(rd) June 2024 // IATA: "Airline Profitability Outlook
Improves for 2024"; 3(rd) June 2024
5 (#_ftnref5) IATA: "Airline Profitability Outlook Improves for 2024"; 3rd
June 2024
6 (#_ftnref6) Airbus: "GMF 2024-43 Summary take aways"
7 (#_ftnref7) AAPA: "Asia Pacific Airlines Return to Profitability in 2023";
18(th) June 2024 (based on data of 27 airlines based in Asia/Pacific)
8 (#_ftnref8) Cirium: "APAC passenger and cargo demand up again in July:
AAPA"; 30(th) August 2024
9 (#_ftnref9) Cirium: "APAC passenger and cargo demand up again in July:
AAPA"; 30th August 2024
10 (#_ftnref10) Cirium: "China needs 8,830 new aircraft in next 20 years:
Boeing"; 27(th) August 2024
11 (#_ftnref11) IATA: "Global Outlook for Air Transport: Deep Change"; June
2024
12 (#_ftnref12) ISHKA: "ALC Q2 2024: Boeing strike could slow deliveries,
over-ordered airlines will 'need lessor help' "; 7(th) August 2024
13 (#_ftnref13) ISHKA: "Lessor order books: ACG and Macquarie Boeing orders
hit the books, 33 leasing deliveries in July"; 21(st) August 2024
14 (#_ftnref14) ISHKA: "Lessor order books: ACG and Macquarie Boeing orders
hit the books, 33 leasing deliveries in July"; 21st August 2024
15 (#_ftnref15) ISHKA: "AerCap Q2 2024: Why engines are driving mid-life
demand, lessor buys 36 of Spirit's A320neo family order"; 5(th) August 2024
16 (#_ftnref16) Thai Airways International PCL: "Management´s Discussion
and Analysis for the second quarter of 2024 ended June 30, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries"
17 (#_ftnref17) Cirium: "Thai Airways to resume Brussels service"; 5(th)
June 2024
18 (#_ftnref18) Thai Airways International PCL: "Management´s Discussion
and Analysis for the second quarter of 2024 ended June 30, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries"
19 (#_ftnref19) Thai Airways International PCL: "Management´s Discussion
and Analysis for the second quarter of 2024 ended June 30, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries"
20 (#_ftnref20) Thai Airways International PCL: "The update on the 11th
progress of the implementation of the Business Rehabilitation Plan for the
period from 15 December 2023 to 14 March 2024 (3(rd) quarter of the 3rd year);
27(th) March 2024 // Thai Airways International PCL: "The update on the 12(th)
progress of the implementation of the Business Rehabilitation Plan for the
period from 25 March 2024 to 14 June 2024 (4(th) quarter of the 3(rd) year);
28(th) June 2024
21 (#_ftnref21) Thai Airways International PCL: "Management´s Discussion
and Analysis for the three months ended March 31, 2024, for Thai Airways
International Public Company Limited and Its Subsidiaries"
22 (#_ftnref22) Thai Airways International PCL: "Management´s Discussion
and Analysis for the second quarter of 2024 ended June 30, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries"
23 (#_ftnref23) Thai Airways International PCL: "Management´s Discussion
and Analysis for the first quarter of 2024 ended March 31, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries"
24 (#_ftnref24) Thai Airways International PCL: "Management´s Discussion
and Analysis for the first quarter of 2024 ended March 31, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries"
25 (#_ftnref25) Bundesverband Deutscher Banken; 9(th) August 2024
26 (#_ftnref26) Thai Airways International PCL: "Management´s Discussion
and Analysis for the first quarter of 2024 ended March 31, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries"
27 (#_ftnref27) Thai Airways International PCL: "Management´s Discussion
and Analysis for the second quarter of 2024 ended June 30, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries"
28 (#_ftnref28) Thai Airways International PCL: "Management´s Discussion
and Analysis for the first quarter of 2024 ended March 31, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries"
29 (#_ftnref29) Cirium: "Thai Airways second-quarter profit slips"; 9(th)
August 2024
30 (#_ftnref30) Thai Airways International PCL: "Management´s Discussion
and Analysis for the second quarter of 2024 ended June 30, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries"
31 (#_ftnref31) Cirium: "Thai Airways second-quarter profit slips"; 9(th)
August 2024
32 (#_ftnref32) Thai Airways International PCL: "Management´s Discussion
and Analysis for the second quarter of 2024 ended June 30, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries" //
Königlich Thailändisches Generalkonsulat München: "REISENDE GRUPPE 2: VISA
EXEMPTION"; 22(nd) August 2024
33 (#_ftnref33) Ch-Aviation: "Thai Airways expects 13 aircraft deliveries in
2025"; 28(th) August 2024
34 (#_ftnref34) Ch-Aviation: "Thai Airways CEO now says B777s not sold";
16(th) August 2024
35 (#_ftnref35) The Nati: "New aircraft deliveries on: "6 Thai airlines eye
fleet expansion as aviation industry bounces back"; 23(rd) August 2024
36 (#_ftnref36) The Nation: "Extension of visa waiver results in
unprecedented growth in the Thai tourism sector, boosting economic prospects
in both primary and secondary cities"; 5(th) July 2024
37 (#_ftnref37) The Nation: "Thai aviation industry gearing up for rapid
expansion in the coming years"; 8(th) July 2024
38 (#_ftnref38) Thai Airways International PCL: "Management´s Discussion
and Analysis for the second quarter of 2024 ended June 30, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries" //
Königlich Thailändisches Generalkonsulat München: "REISENDE GRUPPE 2: VISA
EXEMPTION"; 22(nd) August 2024
39 (#_ftnref39) The Nation: "Thai aviation industry gearing up for rapid
expansion in the coming years"; 8(th) July 2024
40 (#_ftnref40) Thai Airways International PCL: "Management´s Discussion
and Analysis for the second quarter of 2024 ended June 30, 2024, for Thai
Airways International Public Company Limited and Its Subsidiaries"
41 (#_ftnref41) ISHKA: "New aircraft deliveries: July 2024"; 16(th) August
2024
42 (#_ftnref42) ISHKA: July 2024"; 16th August 2024
43 (#_ftnref43) Cirium: "JAL to order A350-900s, 787-9s and A321neos";
21(st) March 2024
44 (#_ftnref44) FlightGlobal: "Israel's El Al tentatively signs for up to
nine more 787s"; 23rd March 2024
45 (#_ftnref45) Cirium: "CALC delivers two 787s to Lufthansa"; 16(th) April
2024
46 (#_ftnref46) Cirium: "AJW acquires ex-Kalair 787"; 25(th) April 2024 / A
J Walter Aviation Limited: "About us"; 5(th) June 2024
47 (#_ftnref47) Cirium: "DEALS REPORT: Bidding war for Lynx jets; Scoot's E2
escape clause"; 26(th) April 2024
48 (#_ftnref48) ISHKA: "New aircraft deliveries: May 2024"; 19(th) June 2024
49 (#_ftnref49) Cirium: "NETWORKS REPORT: Has peak passenger demand
passed?"; 21st June 2024
50 (#_ftnref50) Cirium: "BA closes Japanese equity financing for 787"; 5(th)
July 2024
51 (#_ftnref51) Cirium: "BA switches to GEnx for incoming 787s"; 23(rd) July
2024
52 (#_ftnref52) Cirium: "Korean signs for up to 50 Boeing widebodies";
22(nd) July 2024
53 (#_ftnref53) Cirium: "JAL agrees deal for up to 20 more 787s"; 22(nd)
July 2024 // Cirium: "JAL picks GEnx-1B engines to power new 787s"; 23(rd)
July 2024
54 (#_ftnref54) ISHKA: "Lessor order books: ACG and Macquarie Boeing orders
hit the books, 33 leasing deliveries in July"; 21(st) August 2024
55 (#_ftnref55) ISHKA: "Lessor order books: ACG and Macquarie Boeing orders
hit the books, 33 leasing deliveries in July"; 21st August 2024
56 (#_ftnref56) Air Lease Corporation: "Air Lease Corporation Announces
Delivery of First of Ten New Boeing 787-10 Aircraft to Korean Air"; 7(th)
August 2024
57 (#_ftnref57) ISHKA: "Remarketing Watch Data Sheet: August 2024"; 15(th)
August 2024
58 (#_ftnref58) ISHKA: "Market snapshot: Trading levels, interest rates, and
unsecured debt issuances"; 22(nd) August 2024
59 (#_ftnref59) Cirium: "Rolls sees time-on-wing as key to regaining 787
market share"; 1(st) August 2024
60 (#_ftnref60) CNN: "Boeing's new CEO is already making an overdue change
his first day on the job"; 8th August 2024
61 (#_ftnref61) Cirium: "Boeing to buy Spirit AeroSystems in $4.7 billion
deal"; 1st July 2024
62 (#_ftnref62) ISHKA: "ISTAT Austin: Lessors CEOs debate peak aircraft
shortage and M&A"; 8th March 2024
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