BOC Aviation’s upbeat outlook weighed down by Russia write downs

Lessor BOC Aviation is optimistic about the global airline market, although its exposure to Russia hurt profitability in 2022. In BOC’s 2022 results statement, CE Robert Martin painted an optimistic picture for air travel, noting a “robust recovery in passenger demand”, which helped cash flows for the aviation sector. “The pace of airline passenger demand recovery and the airline sector’s return to profitability has positively surprised most of the aviation industry,” says Martin. “This demand strength has enabled airlines to boost pricing, offsetting higher labour and fuel costs to generate record yields and – in some cases – record profits. This has especially been the case for airlines in the United States, the Middle East, Australia and even parts of Asia, where demand recovery has been most pronounced.” Martin notes that the easing of travel restrictions in China this year will provide a further boost to the sector, particularly for Asian carriers. Despite the optimistic outlook, net profits fell 96.4% to $20m. BOC Aviation attributes the shortfall to a $507m in write downs against aircraft in Russia - several key countries imposed sanctions on Russia following its invasion of Ukraine in February 2022. <br/>