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Amedeo Air Four Plus on the A380

No dramas for aircraft leasing funds

Amedeo Air Four Plus on the A380 – The wide-body (twin-aisle) aircraft leasing specialist sector fund, Amedeo Air Four Plus (AA4), has this morning published its annual report, covering the period to 31 May 2019.

AA4 owns predominantly Airbus aircraft, including six A380-800 series planes, which are all leased to Emirates. It also has two Boeing 777-300 extended range aircraft in the fleet, which are also leased to Emirates. Thai Airways and Abu Dhabi’s Etihad are the other two airlines currently running AA4 aircraft.

Chairman Robin Hallam discusses the A380 portfolio

We note that in February 2019, it was announced that Airbus would stop producing A380 aircraft in 2021. With this in mind, we are publishing a large chunk of AA4 chairman Robin Hallam’s statement from the annual report,

“The key development during the period was the announcement on 14 February 2019 that Airbus will close production of the A380 in 2021. This development means that the total production run for the aircraft will be around 250 units, almost half of which will be operated by Emirates (with whom the company has six A380s on fixed-term leases). The A380 remains a unique double-decker aircraft in that it has the capability to carry over 500 passengers on two decks and this can help facilitate growth at slot-constrained airports around the world. The announcement by Airbus has no direct impact on the company’s leases nor its ability to pay targeted distributions. The company’s first lease expiry does not fall due until 2026. While the A380 forms approximately two-thirds of the group’s portfolio by appraised value, the portfolio is complemented and diversified by two additional aircraft models, namely the B777-300ER and A350-900. The company’s share price fell sharply on the day of the Airbus announcement, having demonstrated little volatility since launch in 2015 and currently resides at 91.25 pence at the time of writing. 

With respect to new transactions the landscape remains much as I described in my statement accompanying the most recent half-yearly report. It is pleasing to consider that aircraft investment is gaining traction with investors as a more traditional asset class, but the challenge of securing high quality transactions that will maintain the company’s existing sterling denominated dividend target and double digit total return target mean the board has not been able to recommend any new transactions for shareholders to consider. Having discussed the recent pace of growth with shareholders and the company’s advisors I continue to believe that we should be patient and exercise discipline with regard to future growth. During the period each of our lessees has continued to meet its obligations and so dividends have been maintained at the targeted level.”

AA4: Amedeo Air Four Plus on the A380

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