Dubai aviation firm DAE takes $538m write-off on leased aircraft with Russian carriers

DAE has filed insurance claims totalling $1b and 'expect to file more'

The Dubai aircraft leasing company DAE (Dubai Aerospace Enterprise) took a $537.9 million write-off on aircraft operating in the fleets of Russian airlines during the first quarter of 2022. These aircraft with Russian carriers are ‘no longer in the company’s control’, DAE said in a statement.

"We proactively addressed the loss of control of our aircraft on lease to airlines in Russia by writing off our net investment,” said Firoz Tarapore, CEO of DAE. “We have filed claims of $1 billion under certain insurance policies and expect to file additional claims to recover amounts due to us.”

Across the board, DAE (Dubai Aerospace Enterprise) recorded revenues of $298 million in the first three months from $307.5 million a year ago, which delivered an adjusted net income of $46.6 million. Once exceptional items are included, DAE had a loss of $491.3 million against a profit of $8.3 million a year ago. Total assets dipped to $11.64 million from $12.60 billion during the period, primarily as a result of the asset write-off from the Russia exposure.

Riding back on travel demand

“Our financial results for the first quarter of 2022 demonstrate the underlying strength of DAE’s franchise, and the continuing demand-led recovery of global air travel," the CEO said. "We continue to see a trend toward air travel normalcy with all major indicators pointing toward a strong summer season ahead for our airline customers."

In the first three months, while DAE reported less revenue from aircraft leases, it was offset by an increase in gains from disposal of aircraft. Also, "DAE Engineering had another strong quarter, with its Joramco business again achieving record revenue, as well as adding and renewing a number of large maintenance agreements, including with GetJet Airlines, DHL, Ryanair, and Corendon Airlines in the quarter," said Tarapore. "We look forward to continuing to expand our engineering business.”

1. DAE's cashflow from operating activities for the three months ended March 31, 2022, increased 63.7% to $357 million compared to $218 million a year ago.

2. DAE also closed a new $1. billion revolving credit facility during Q1-2022.

3. Total number of aircraft in the fleet by end March was 384 (December 31, 2021: 385), which consists of 295 owned, 81 managed, and eight committed aircraft.

4. DAE purchased three owned aircraft (December 31, 2021: 18) and 20 managed aircraft, and sold four owned aircraft.

Source: Gulfnews

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