London-listed aircraft leasing company Avation PLC (LSE:AVAP) has taken another step forward in executing its long-term fleet strategy, announcing a second aircraft placement with Cambodia Airways. The deal highlights both the strength of Avation’s customer relationships and the company’s disciplined approach to growth.
Speaking with HotCopper’s Watch List, Avation’s Investor Relations Director Tim Bacchus explained why repeat customers are so valuable in the aircraft leasing business.
Why Repeat Customers Matter
According to Bacchus, working with the same airline across multiple transactions significantly reduces both costs and operational risk.
“When you have a repeat customer as an aircraft lessor, you get a number of benefits. One of the key things is you essentially lower the cost of the scale of a transaction.”
Using the same legal documents, lease templates, and manufacturer specifications across multiple aircraft placements improves efficiency. In this case, Avation is working with ATR as the aircraft manufacturer, allowing both Avation and the airline to standardise aircraft configurations and streamline negotiations.
There’s also a long-term advantage: lower transition costs. When a lease expires, it’s far cheaper to keep an aircraft with the same airline than to move it to a new operator. That reduces downtime, re-marketing costs, and technical repositioning expenses.
While repeat business does increase exposure to individual customers, Avation is balancing this by diversifying its airline base. The company now works with 16 airlines across 15 countries, including its first customer in South America, and continues to expand geographically.
Disciplined Fleet Growth
The Cambodia Airways aircraft represents the fourth delivery from Avation’s ATR order book and the second placed with Cambodia Airways. Bacchus emphasised that this reflects “measured, disciplined growth” rather than aggressive expansion.
Avation currently has nine ATR aircraft on order, which will be added to the fleet by the end of its fiscal year in June 2028. This will grow the fleet from 33 aircraft today to 42 aircraft over the next few years.
Beyond that, Avation holds 24 purchase rights with ATR, giving the company flexibility to pursue further growth post-2028 as market conditions and capital availability allow.
Long-Term Value for Shareholders
The strategic importance of these placements goes beyond simple fleet expansion. New ATR aircraft are typically leased on 12-year contracts, which materially improves the company’s average remaining lease term.
At present, Avation’s average remaining lease term sits at just over four years, below many listed peers. As the new aircraft enter service, that average will increase significantly, locking in longer-dated, contracted cash flows.
“The longer lease remaining term is a good thing for shareholders,” Bacchus said, as it provides clearer visibility on future revenue and strengthens the company’s net asset value (NAV) growth story.
A Clear Path Forward
Taken together, the repeat placement with Cambodia Airways, the steady rollout of ATR aircraft, and the extension of long-term leases underline Avation’s strategy:
- Build scale carefully
- Strengthen customer relationships
- Improve cash-flow visibility
- Grow NAV in a disciplined way
For investors, the message is clear. Avation is building a well-defined, long-term value story based on stable earnings, diversified customers, and a carefully managed fleet expansion.
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