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Name: FLY LEASING
7JetSet7 Code: BBB
Status: Operational
Region: EUROPE
City: DUBLIN
Country: IRELAND
Employees 600
Web: babcockbrown.com
Email: info@babcockbrown.com
Telephone: +61 2 9229 1800
Fax: +61 2 9231 5619
Sita:
Background
(definitions)

Click below for data links:
BB-LSG04A
BBB-2005-TOP50-LSG-A
BBB-2005-TOP50-LSG-B
BBB-LOGO
BBB-LSG04
BBB-LSG04B
BBB-LSG04C
BBB-LSG04D
BBB-NEWS-JAN09

Formed in 1977. Formerly Babcock & Brown Air Limited (BBB) ("B&B Air"). Fly Leasing is a global lessor of modern, fuel-efficient commercial jet airplanes.

Address:

(Current)
Dublin, Ireland

(Previopusly)
Level 23, The Chifley Tower
2 Chifley Square
Sydney, NSW 2000, Australia

Fly Leasing (BBB) operates from 18 offices worldwide, anchored by administrative hub offices in Sydney, San Francisco, New York, Munich and London. (BBB)’s corporate headquarters are in Sydney.

February 2004: See attached link to "Leasing Survey 2004." Shows Babcock & Brown (BBB) ranked 9th of top 40 airplane leasing companies with 106 narrow bodies and 14 wide bodies.

March 2006: Based on an "Airline Business" magazine survey of airplane leasing companies, Babcock & Brown (BBB) has a fleet of 156 airplanes valued at $3,337 million, and is ranked 11th of the top 50 airplane leasing companies (see attached data).

(BBB) reported a $252 million profit after tax for 2005.

April 2006: Precision Conversions signed with Babcock & Brown Aircraft Management (BBB) for two 757-200 cargo conversions. The work is scheduled to be completed by year end, and will be done at Flightstar Aircraft Services in Jacksonville. Operating customers for the airplanes were not disclosed.

September 2007: Babcock & Brown (BBB) filed with the USA Securities and Exchange Commission to spin off part of its commercial airplane leasing business in an Initial Public Offering (IPO) that could raise more than >$440 million. The newly created lessor will be known as (BBB). Shares are being offered at $22 to $24 each, and will be listed on the New York Stock Exchange under the symbol FLY, (BBB) said in a statement. (BBB) will have an initial portfolio of 47 airplanes leased to 29 companies in 16 countries. "The launch of (BBB) is a significant next step for (BBB) Aircraft Management, which has a successful 17-year global track record in airplane origination and asset management," (BBB) (CEO) Phil Green said.

Colm Barrington, who has been with (BBB) since 1994, was named (CEO) of (BBB). In a statement, (BBB) said that the spun-off firm will "seek to take advantage of the favorable industry conditions and growth opportunities in the airplane industry." It cited "robust" demand for air travel, "re-fleeting" by airlines in developed markets and an increase in the percentage of leased airplanes in the global fleet from 17% in 1990 to an expected 40% "over the next 10 years."

October 2007: JetWorks Leasing, on behalf of a group of institutional investors, arranged the sale of a 747-400 on lease to United Airlines (UAL) to Top Flight Holdings, a company controlled by Babcock & Brown Aircraft Management (BBB).

December 2007: Precision Conversions will provide Babcock & Brown Aircraft Management (BBB) with a 15-pallet-position 757-200PCF. Following modification next year at the Flightstar facility in Jacksonville, CargoJet (CJT) will operate the Rolls-Royce (RRC)-powered airplanes under a lease from (BBB).

(BBB) Management placed an order for 20 737-800s valued at $1.5 billion. The (BBB) order, brings (BBB)'s total 737NG fleet to >125. "(BBB) Management has experienced great success in placing the 737 with airline operators around the world," President Steven Zissis said.

(BBB) announced the acquisition of 7 airplanes currently on lease with 4 carriers. The planes, worth a combined $250 million, will increase the lessor's portfolio to 54 airplanes, it said. The purchase comprises 4 A319-100s on lease to US Airways (AMW)/(USA), 1 A320-200 on lease to Clickair (CLK), 1 737-900ER on lease to SpiceJet (ROJ), and 1 747-400 on lease to United Airlines (UAL). (BBB) (CEO) Colm Barrington said, "Market conditions remain robust, with strong demand from airlines for new airplanes and insufficient capacity from manufacturers to meet this demand."

July 2008: Babcock & Brown (BBB) leased and delivered 2 former (ATA) Airlines (AAT) 757-200s to Ethiopian Airlines (ETH). The lease agreements are 5 years each. B&B (BBB) said it is "in discussions with several parties" regarding 2 additional former (ATA) (AAT) airplanes.

August 2008: The Aer Lingus (ARL) Group appointed Babcock & Brown Air (BBB) (CEO) Colm Barrington as Chairman, succeeding John Sharman effective next month. Barrington currently is a non-executive director of the Dublin Airport Authority, from which he will resign before taking over at (ARL).

January 2009: SEE ATTACHED - - "BBB-NEWS-JAN09."

March 2009: Babcock & Brown Air (BBB) 4th quarter 2008, resulted in net income of +$9.4 million, and available cash flow of $35.9 million. (BBB) had unrestricted cash of $56.8 million at quarter end.
(BBB) had a pre-tax gain of $6.5 million from the sale of 1 airplane.

For full year 2008, (BBB) had a net income of +$48.1 million, available cash flow of $139.2 million, unrestricted cash increased from $15.6 million to $56.8 million, and a pre-tax gain of $11.4 million from the sale of 2 airplanes.

"(BBB) has entered 2009 in a sound financial position after a successful year in 2008," said Colm Barrington (CEO). "During 2008, we increased our portfolio from 52 to 62 airplanes through the acquisition of 12 modern, fuel-efficient airplanes and the sale of 2 airplanes from our original portfolio. This allowed us to maintain an average age of 6.4 years for our portfolio with an average remaining lease term of 5.5 years at year end. Despite 5 premature lease returns and 3 scheduled lease re-marketings in 2008, all but 1 of our 62 airplanes were on lease or committed for lease at year end. We are particularly pleased that we sold 2 airplanes during the year for an aggregate net gain of +$11.4 million, a prime example of (BBB)'s active portfolio management strategy." "In 2008, (BBB) expanded its fleet of modern commercial airplanes, further diversified its lessee base, significantly increased its Available Cash Flow, and returned $73.7 million to shareholders in the form of dividends and share buybacks," added Barrington. "In addition, we repaid $24.9 million of debt and increased our unrestricted cash by $41.1 million to $56.8 million. Despite general economic and market uncertainties, (BBB) had a very successful 1st full year as a public company and is well-positioned for the future."

December 2009: Aircastle (CSL) and Babcock & Brown (BBB) expressed relative optimism while presenting to investors at the "Next Generation Equity Research" conference in New York. Both see early stages of recovery with lease rates stabilizing and airlines starting to think about growth again, especially in robust markets like East Asia and Latin America. On the other hand, some markets like India and Eastern Europe remain weak with respect to airplane demand, while threats like the Swine flu (H1N1 Virus) and another fuel spike continue to make airlines and their lessors uneasy. (CSL) and (BBB) also made another important observation: the leasing sector has become less competitive, now that big leasing firms like (ILFC) (ILF), (CIT) Group (TSI) and RBS are facing financial difficulties. That , in turn, could mean more airplane buying opportunities. In (CSL)'s view, market conditions are like they were in 2004, the start of the last upturn, then, as now, about 12% of the world's jet airplane fleet was parked. On the other hand, neither company sees panic selling by the big troubled leasing firms, who seem to be patiently waiting for higher prices.

March 2009: Babcock & Brown Air (BBB) reported a +$89.1 million profit in 2009, up +85.1% from earnings of +$48.1 million the prior year, on a +30.2% lift in revenue to $307.5 million. The lessor said its airplane portfolio "performed strongly with an annual lease utilization factor of 98%" last year. As of December 31, it owned 62 Airbus (EDS) and Boeing (TBC) airplanes (10 A319s, 17 A320s, 1 A330, 19 737s, 1 747, 12 757s, 1 767 and 1 777). It said it "expect[s] airline and financial market conditions to improve in 2010 and we will continue to evaluate airplane acquisition opportunities."

August 2010: Joining the second quarter (Q2) profit parade were fellow lessors "Fly Leasing," newly renamed from B&B Air (BBB) and before that, Babcock & Brown, and AerCap (DEA), the largest lessor not owned by a giant parent company like (AIG), General Electric (GEC) or Pacific Life. Both expressed optimism about industry conditions, with AerCap (DEA) viewing 2011 and 2012 as crucial years in the up cycle (and years during which new rivals like (ALC) and Avolon won’t yet have their newly ordered planes). Both are also encouraged by new capital entering the leasing sector and rising rental rates for 737s and—to a lesser extent, according to (BBB) — A320s (a lesser extent for those with (IAE) engines, anyway, said AerCap (DEA)). For the record, Fly (BBB) has 1 plane placed with Mexicana (CMA), and AerCap (DEA) has 5.

August 2011: FLY Leasing Ltd (BBB) has agreed to purchase a $1.4 billion portfolio of 49 airplanes previously managed by Australia-based Global Aviation Asset Management. The airplanes are currently on lease to 23 airlines in 15 countries. Its portfolio is now 109 airplanes.

January 2012: FLY Leasing Ltd (BBB) has acquired 2 737-800s, 1 on lease to Air China (BEJ) and 1 on lease to Korean Air (KAL). It also sold 1 777-200ER on lease to (KLM) and 1 737-800 on lease to SpiceJet (ROJ) for a total of $139 million.

March 2013: Irish airplane lessor, FLY Leasing (BBB) has sold 6 Boeing 717-200s and plans to channel the proceeds into new airplane acquisitions. The airplanes, which were manufactured in 2001, were originally acquired by (BBB) in 2011 as part of a 49-airplane deal.

“The sale of these non-core airplanes will result in a gain over our current book value and generate gross cash proceeds of $17 million,” FLY Leasing (CEO) Colm Barrington said. “These sales are in line with our strategy of selling non-core airplanes and reinvesting in younger, more popular models to maintain a fleet of modern, fuel-efficient commercial airplanes.”

Barrington added the deal will help deleverage the company and generate cash for future airplane acquisitions.

July 2013: FLY Leasing (BBB) has taken delivery of a new 777-300ER airplane on a sale and leaseback transaction with the (LATAM) Airlines Group (LAN)/(TPR). Additionally, (BBB) has entered into a purchase and leaseback agreement with (LATAM) (LAN)/(TPR) for a new 787-8 airplane scheduled for delivery in September 2013.

FLY (BBB) financed the 777-300ER with funding from the European bank market and its own unrestricted cash.

FLY (BBB) (CEO) Colm Barrington said, “With the delivery of the 777, FLY (BBB) has now acquired six airplanes for approximately $330 million in 2013 and has identified a robust pipeline of additional acquisitions to meet our ambitious growth target. (BBB) is well capitalized to continue its strategy of growing its fleet with young, popular airplanes via acquisitions that will maximize shareholder value.”

August 2013: FLY Leasing Limited (BBB) has acquired a 2013 vintage 737-800. The airplane is on a long-term lease to a leading carrier in China. The purchase was financed with (BBB)'s unrestricted cash and its airplane acquisition facility.

September 2013: FLY Leasing (BBB) has purchased a new 737-800 airplane on a long-term lease to a leading Asian airline. The purchase was financed with FLY (BBB)’s unrestricted cash and its acquisition facility.

October 2013: FLY Leasing (BBB) has taken delivery of a new Boeing 787-8 airplane through a sale and leaseback agreement with (LATAM) (TAM) Airline/(LAN) Airline previously announced in July. The purchase was financed with funding from a European bank and FLY (BBB)'s own cash.

FLY (CEO) Colm Barrington said, “This is the 9th airplane we have acquired this year, bringing our total 2013 acquisitions to >$500 million and our portfolio to 108 airplanes. With a strong reserve of available capital, we are continuing to execute on our strategy of growing our fleet with the most modern airplanes, which will continue to increase our cash flow and earnings per share.”

FLY Leasing (BBB) has purchased a new 737-800 airplane on a long-term lease to a leading Asian airline. The purchase was financed with FLY (BBB)'s unrestricted cash and its acquisition facility.

April 2014: FLY Leasing has added 4 more airplanes to its fleet, comprising 1 Airbus A319 and 3 Boeing 737-800s. The airplanes are leased to leading airlines in Europe and Asia with a remaining weighted average remaining lease term of 6.3 years.

June 2014: FLY Leasing (BBB) has sold 4 airplanes from its portfolio. The 4 airplanes have an average age of 14 years and the sales will further reduce the age of (BBB)'s fleet. The sales generated a gain over (BBB)'s net book value.

September 2014: FLY Leasing (BBB) has acquired 2 Airbus A330-300s, manufactured in 2013, and on lease to a leading airline in Asia in a sale-and-leaseback transaction.

November 2014: FLY Leasing Limited (BBB) has agreed to sell 8 of the 11 Boeing 757 airplanes in its fleet. The sales are expected to close by the end of 2015. (BBB) said the sale of these 8 older 757 airplanes, averaging 15.7 years of age, will lower the average age of its fleet. (BBB) is on track to grow its fleet by >15% in 2014, and expects similar growth in 2015.

December 2014: FLY Leasing (BBB) is taking delivery of 6 new Airbus A321s this quarter. (BBB) has purchased and committed to approximately $1 billion of investment in new airplanes in 2014. It has acquired 20 airplanes so far this year.

March 2015: FLY Leasing (BBB) acquired an Airbus A321-200 airplane, manufactured in 2015. The airplane is on a long-term lease to an unnamed leading European airline.

April 2015: FLY Leasing (BBB) has acquired a Boeing 737-800 airplane manufactured in 2008. The 737-800 is on lease to a leading airline in Europe. (BBB) now has a total of 55 737-800s in its growing fleet and is on track to invest $750 million in airplane acquisitions this year, on top of strong fleet growth in both 2013 and 2014.

September 2015: News Item A-1: FLY Leasing (BBB) acquired a new Boeing 737-800 airplane in a sale and leaseback transaction with an undisclosed airline. The 737-800 is on lease until 2027.

News Item A-2: FLY Leasing (BBB) is selling 12 older aircraft from its portfolio for $240 million as the company continues its fleet renewal strategy.

The aircraft will transfer individually to the unidentified new owner, with all transfers expected to be completed by the end of the year. FLY said the sale is expected to produce a $12 million pre-tax gain, and it expects to incur $3 million in non-cash charges relating to debt modification and curtailment costs. The company said the gain and associated expenses would be recognized on a pro rata basis at the time of each transfer. The sale is subject to the usual closing conditions.

FLY (BBB) (CEO) Colm Barrington said: “FLY (BBB) is moving decisively to monetize older aircraft and to reinvest the capital into younger aircraft to drive higher return on equity. In total, this year we have sold (or contracted to sell) 57 aircraft with an average of 13 years.”

He said FLY (BBB) believes this is “the right time to rotate out of mid-life and older aircraft and to invest in younger models.” The 12 aircraft have an average age of 13 years and the sale will produce approximately $80 million in cash. This is on top of a $35 million gain and $425 million in cash to be generated by a portfolio sale of 33 aircraft announced in June.

FLY (BBB) also completed the sale of a 22-year-old Boeing 747-400 aircraft earlier this month.

FLY (BBB) leases its aircraft under multi-year operating lease contracts to airlines across the globe. It is managed and serviced by USA-based aircraft lease, management, and financing firm, (BBAM).

October 2015: FLY Leasing (BBB) acquired a Boeing 737-800 airplane in a sale-and-leaseback transaction with a European airline with which (BBB) has a long-standing relationship.

January 2017: 1 737-8AS (33594, VT-SLG), ex-(HS-DBM), Fly Leasing (BBB) leased, ferried Bangkok to Delhi.

August 2017: News Item A-1: Dublin-based FLY Leasing continued to boost its fleet and shore up equity in the 2nd quarter, aiming to meet its $750 million acquisition goal by the end of 2017.

FLY acquired 5 aircraft during the quarter, including 4 that were new deliveries from manufacturers, a $290 million investment. The 4 new aircraft included a Boeing 787 on a 12-year lease to an unidentified European airline; a 737 MAX 8 on a 12-year lease to Indonesian low-cost carrier (LCC) Lion Air (MLI); a 737-800 on a 10-year lease to Turkish Airlines (THY); and an Airbus A320-200 on a 12-year lease to an unidentified Asian airline. FLY has not identified the lessee for the 5th aircraft, which was a 737, its model-type unspecified.

“The 5 aircraft are on leases with an average term of 11 years, further enhancing the overall quality of our fleet,” FLY (CEO) Colm Barrington said. “We expect to see improved earnings from these aircraft as the year progresses.”

As of June 30, the company’s portfolio comprised 81 aircraft on lease to 45 airlines in 29 countries, with an average age of 6.8 years. At the end of the quarter the fleet was generating annualized rental revenue of about $352 million, the company said, with 100% of the portfolio leased and utilized during the 2nd quarter.

FLY (BBB) reported $2.9 million in net income for the 2nd quarter of 2017, down 38.4% from $4.7 million a year ago. Revenues were up 2.4% year-over-year to $79.8 million as the company reported a +10% increase in operating lease rental revenue, offset by a complete lack of end of lease revenue for the quarter (compared to $4.9 million in end of lease revenue in 2Q 2016). Expenses totaled $76 million for the quarter, up +7% year-over-year as depreciation expenses rose 15.4% and maintenance costs increased +67%. FLY’s operating income for the quarter was $3.8 million, down -47.2% from a year ago.

FLY (BBB) is in the midst of share repurchasing push. As of June 30, FLY had repurchased 2.1 million shares for approximately $27.2 million. Following the end of the quarter through August 9, the company has repurchased an additional 740,957 shares for approximately $10.2 million. The company has approximately $29 million authorized for remaining share repurchases this year.

“FLY continues to aggressively repurchase its shares. Our average repurchase price of just over $13 per share has helped increase our net book value per share this year to $19.08,” Barrington said. “We are focused on growth and have a strong pipeline of attractive aircraft investments in the coming months. We expect to meet our $750 million acquisition target in 2017, and we have the financial resources to acquire an additional $2 billion of aircraft.”

As of June 30, FLY (BBB)’s assets totaled $3.5 billion, including $3 billion in aircraft and flight equipment. (BBB)’s total cash was $455.2 million, of which $335.5 million was unrestricted. FLY’s fleet at the end of the quarter comprised 13 Airbus A320s, 9 A319s, 3 A321s, 3 A330s, 2 A340s, and 41 Boeing 737s, 5 787s, 3 757s and 2 777s.

News Item A-2: FLY Leasing (BBB) appointed Julie Ruehl as (CFO).

Fleet:
(definitions)

August 2017:

1 737-3YO (CFM56-3) (23926, EI-DJS), RF (EZY) 2005-07.

1 737-300 (CFM56-3), LST (AMW).

2 737-300 (CFM56-3), LST (ARE).

1 737-300 (CFM56-3), LST (BAF).

2 737-300 (CFM56-3B1), FOR LEASE.

2 737-300 (CFM56-3), LST (EBA).

3 737-300 (CFM56-3), LST (GFL).

1 737-300 (CFM56-3), LST (HGA).

1 737-300 (CFM56-3), LST (SAB).

1 737-300 (CFM56-3), LST (SWA).

1 737-400 (CFM56-3), LST (AAR).

1 737-400 (CFM56-3), LST (ADH).

2 737-400 (CFM56-3), LST (BRT).

2 737-400 (CFM56-3), LST (EBA).

1 737-400 (CFM56-3), LST (IST).

1 737-400 (CFM56-3), LST (TSF).

1 737-500 (CFM56-3), LST (BAB).

4 737-500 (CFM56-3), LST (BMA).

1 737-500 (CFM56-3), LST (BRI).

1 737-500 (CFM56-3), LST (GUN).

1 737-500 (CFM56-3), LST (ROS).

1 737-505 (CFM56-3) (24272, EI-DKV; RF (BAB) 2005-07).

4 737-600 (CFM56-3), LST (SAS).

1 737-800 (CFM56-7B), LST (BEJ), 2012-01.

1 737-800 (CFM56-7B), LST (KAL), 2012-01.

1 737-800 (CFM56-7B), ST (ROJ) 2012-01.

1 737-8AS (33594, VT-SLG), EX-(HS-DBM), FLY LEASING (BBB) LEASED 2017-01, FERRIED BANGKOK TO DELHI.

1 737-86N (CFM56-7B) (28621, VT-SPE).

1 747-200B, LST (AFA).

1 757-200 (RB2111-535E4), LST (ATZ).

3 757-236 (RB211-535E4), LST (BAB).

2 757-200 (RB211-535E4), LST (BRI).

1 757-200, LST (COH).

1 757-200, LST (ICE).

3 757-200, LST (ROY).

1 767-300, LST (AFA).

1 767-300, LST (ETH).

2 767-300, LST (SAS).

1 767-300, LST (SPP).

1 777-200ER ST (KLM) 2012-01.

1 787-800, 2013-10.

6 A321, 2014-09.

Management:
(definitions)

COLM BARRINGTON, CHAIRMAN & CHIEF EXECUTIVE OFFICER (CEO) (BBB) IRELAND.

STEVE ZISSIS, MANAGING DIRECTOR & PRESIDENT (bbam_info@babcockbrown.com).

PHIL GREEN, CHIEF EXECUTIVE OFFICER (CEO) (BBB).

MS JULIE RUEHL, CHIEF FINANCIAL OFFICER (CFO) (2017-08).

BRIAN O'GORMAN, VP TECHNICAL SERVICES.

KEITH ADDISON, VP ENGINE PROGRAMS.

 
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