Credit ratings agency Moody’s Investors Service revised Dubai Aerospace Enterprise (DAE)’s outlook to stable from negative and affirmed its Baa3 issuer rating, citing the company's strong liquidity position and capital management and as air travel shows signs of recovery.
The affirmation is also based on Moody's expectation that challenges to Dubai lessor's profitability and earnings will be gradually alleviated by growing air travel volumes through 2023.
“Demand for leased aircraft will rise as air carriers rebuild capacity to serve strengthening air travel demand, helping to improve DAE's profitability and cash flow metrics over the next 12 to 18 months,” Moody's said.
DAE is one of the world’s largest aircraft leasing companies with offices in a number of countries. The company had a total owned, managed and committed fleet of 377 aircraft as of March 31. The aggregate book value of its owned fleet, including finance lease and loan receivables, was $11.6 billion while the estimated value of its managed fleet was $1.4bn.
The aviation sector is improving gradually after the movement restrictions imposed to curb the Covid-19 pandemic dealt it a severe blow. Air travel demand is beginning to recover as countries reopen borders, leading to higher aircraft movements.
DAE is well placed to tap into this recovery since its multiple sources of liquidity provide over 200 per cent coverage of cash requirements for operating expenses, debt maturities and aircraft purchase commitments for the year commencing April 2021, Moody's estimates.
“DAE's liquidity is aided by ample borrowing availability under its $3bn revolving credit facilities, as well as well-distributed debt maturities and moderate aircraft purchase commitments,” it said.
The ratings agency also expects leasing to remain an important source of aircraft acquisition capital for the airline industry. Recovery will provide new leasing opportunities that will help to revive DAE's cash flows and earnings, Moody's added.
“DAE's liquidity and access to capital should position it well to pursue opportunities to acquire leased aircraft as demand conditions improve, strengthening revenues and cash flow to levels that align with expectations for the company's existing ratings.”
Earlier this year, DAE placed an order to buy 15 Boeing 737 Max jets for $1.8bn to tap into rising travel demand.
Moody's could upgrade DAE's ratings if the company maintains stronger liquidity compared to its peers and recovery in air travel volumes accelerates, it said.
Company%20Profile
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more from Janine di Giovanni
ILT20%20UAE%20stars
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MATCH INFO
Champions League quarter-final, first leg
Tottenham Hotspur v Manchester City, Tuesday, 11pm (UAE)
Matches can be watched on BeIN Sports
MO
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FIXTURES
UAE’s remaining fixtures in World Cup qualification R2
Oct 8: Malaysia (h)
Oct 13: Indonesia (a)
Nov 12: Thailand (h)
Nov 17: Vietnam (h)
ROUTE%20TO%20TITLE
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The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
FIXTURES
Monday, January 28
Iran v Japan, Hazza bin Zayed Stadium (6pm)
Tuesday, January 29
UAEv Qatar, Mohamed Bin Zayed Stadium (6pm)
Friday, February 1
Final, Zayed Sports City Stadium (6pm)
57%20Seconds
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Stage 5 results
1 Tadej Pogacar (SLO) UAE Team Emirates 3:48:53
2 Alexey Lutsenko (KAZ) Astana Pro Team -
3 Adam Yates (GBR) Mitchelton-Scott -
4 David Gaudu (FRA) Groupama-FDJ 0:00:04
5 Ilnur Zakarin (RUS) CCC Team 0:00:07
General Classification:
1 Adam Yates (GBR) Mitchelton-Scott 20:35:04
2 Tadej Pogacar (SlO) UAE Team Emirates 0:01:01
3 Alexey Lutsenko (KAZ) Astana Pro Team 0:01:33
4 David Gaudu (FRA) Groupama-FDJ 0:01:48
5 Rafał Majka (POL) Bora-Hansgrohe 0:02:11
The drill
Recharge as needed, says Mat Dryden: “We try to make it a rule that every two to three months, even if it’s for four days, we get away, get some time together, recharge, refresh.” The couple take an hour a day to check into their businesses and that’s it.
Stick to the schedule, says Mike Addo: “We have an entire wall known as ‘The Lab,’ covered with colour-coded Post-it notes dedicated to our joint weekly planner, content board, marketing strategy, trends, ideas and upcoming meetings.”
Be a team, suggests Addo: “When training together, you have to trust in each other’s abilities. Otherwise working out together very quickly becomes one person training the other.”
Pull your weight, says Thuymi Do: “To do what we do, there definitely can be no lazy member of the team.”