Announcements

INTRODUCTION

While the COVID-19 pandemic has affected a majority of industries globally, the aviation sector has been particularly impacted. Given the current circumstances in the aviation market, Avia Solutions Group PLC together with each of its subsidiaries, (the “Group”) intends to share certain additional operational business updates while the aviation sector continues to be particularly impacted by the COVID-19 pandemic.

For the avoidance of doubt, the additional operational business updates do not impact the release of the Group's relevant consolidated periodical financial information, which will continue to be announced as per regulatory requirements.

ADDITIONAL OPERATIONAL BUSINESS UPDATE FOR APRIL AND MAY 2020

The table below sets out the revenue of the Group's three key business segments in April and May 2020.

Notes:

1. The Information presented in the table above is not a presentation of consolidated financial information in accordance with IFRS, and does not contain all the necessary adjustments that may be required under IFRS and any applicable law. Accordingly, it is not comparable to the consolidated periodical financial information released by the Group.
2. Below are the most important (but not all) explanations on deviations from the IFRS and the Group’s accounting policy that should be taken into account while reviewing and assessing the revenue information in the table above:
   1. The revenue presented under the reporting segments is calculated by aggregating revenues of each significant Group entity, and does not therefore include the elimination of the inter-entity sales within the Group.  For the Aircraft Trading and Portfolio Management segment, while inter-entity eliminations inside this segment have been conducted, there has not been elimination of revenue with Group entities in other segments.
   2. The Chapman Freeborn Group (part of Aviation Logistics and Distribution Services segment) is accounting for its revenue on a gross basis (UK GAAP) whereas IFRS requires it to be presented on a net basis.  Each month the management of the Group makes its best estimate in order to arrive at the net basis presentation, however, the actual adjustment might significantly differ from the estimate made by the Group.
   3. The impact of foreign currencies in the Group’s foreign operations might not be accurately adjusted and eliminated and could significantly impact the revenue amounts recognised in Euros.
3. The three presented segments are the key business segments of the Group, but do not represent the entirety of the Group's revenues.  Due to this, and due to the fact that the presented numbers are not prepared on an IFRS basis and do not eliminate inter-entity revenues within the Group, these numbers should not be used to generate a figure for consolidated revenue of the Group for the relevant periods.

AVIATION LOGISTICS AND DISTRIBUTION SERVICES

The Group's Aviation Logistics and Distribution Services business segment's revenue during April and May 2020 was principally driven by air cargo chartering, which contributed approximately 70% to the revenue of Aviation Logistics and Distribution Services during the same period. ACMI revenue within this segment has been at historically low levels for the Group during April and May 2020.

Air cargo charter revenue more than doubled during April and May 2020 vs average monthly revenue of Q1 2020 due to the following impacts from the COVID-19 pandemic:

1. high demand for transporting products such as pharmaceuticals, e-commerce purchases and medical equipment;
2. grounding of most of the world’s passenger fleet forcing international belly cargo capacity to decline significantly resulting in a decrease in supply in the market; and
3. shortage of capacity causing a spike in air cargo freight rates. 

The Group believes that the present capacity shortage in air cargo is likely to be reduced in coming months as both the world's passenger fleet belly capacity gradually returns to service and the impact of any global decline in economic activity reduces demand for air cargo.

AVIATION SUPPORT SERVICES

Aviation Support Services segment’s revenue decreased by more than half during April and May 2020, compared to average monthly revenue of Q1 2020. This was mainly caused by quarantine regimes imposed upon the Group's main ground handling and fuelling centres. MRO[1] Base Maintenance was the key driver in the Aviation Support Services business segment revenue.

AIRCRAFT TRADING AND PORTFOLIO MANAGEMENT

After strong performance in Q1 2020, the Aircraft Trading and Portfolio Management business segment saw a decrease in revenue in April and May 2020, as:

1. rent revenues were limited due to the aircraft fleet sales in H2 2019 and Q1 2020; and
2. no trading transactions were carried out in April and May 2020 due to quarantine restrictions imposed in response to the COVID-19 pandemic.

GROUP CASH POSITION

As of the end of May 2020, the Group maintained a cash balance slightly above 300 million US Dollars.

Though numerous countries have started lifting lockdown restrictions and certain air passenger traffic is resuming, the present uncertainty with regard to the duration of the COVID-19 pandemic continues to be significant, and thus prevents businesses from having a clear financial understanding of FY 2020 at this time. The Group will continue to focus on cost saving programs and actively manage available cash resources to be ready to return to normal operations as soon as possible after the COVID-19 pandemic has passed.

DISCLAIMER AND OTHER LEGAL INFORMATION

The Information is summary in nature, it is not comprehensive and has not been independently verified, and it should not be relied upon. The Information addresses certain specific circumstances as at the date they were prepared.

Taking into account all of the above, each member of the Group, its affiliates, and in each case, their direct and indirect shareholders, holding companies, representatives, agents and, advisors and subsidiaries: a) make no representation or warranty of any kind whether express, implied or statutory, as to the correctness, completeness, adequacy, accuracy or reasonableness of the Information presented herein; and b) expressly disclaim (to the extent permitted by law) and exclude any and all responsibility and/or liability which may be based on the Information provided herein, and you, as the recipient, are required to make such independent investigations and verification as you deem necessary.

Neither any member of the Group nor any of their respective directors, officers, employees, agents, representatives or professional advisers shall be liable for any direct, indirect or consequential loss or damage suffered by any person as result of relying on any statement, data or material contained in (or omitted from) the Information. The Group and their affiliates’ in each case direct and indirect shareholders, holding companies, representatives, agents and, advisors and subsidiaries shall be under no obligation to update this Information, provide the recipient with access to any additional information, correct any inaccuracies in it which may become apparent or make other modifications.

The information presented herein does not include, nor shall it be construed as including investment advice on, advice on the merits of, or a recommendation in relation to, buying, selling, subscribing for or underwriting any securities, shares or other financial investments of any kind. If you take any action or decision to buy, sell, subscribe for or underwrite any investments, you do so entirely at your own risk.

The Information and this announcement contains inside information.

This notice and any dispute arising from it or in connection with the Information, whether contractual or non-contractual, is governed by English law and all recipients, by accepting this Information, agree that the courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with the Information