Forget flying high, for the global aviation industry, the current situation remains one of fight or flight. Though the end of 2012 is now on the horizon, the lingering effects of the global financial crisis refuse to dissipate. Economic recession and the sovereign debt crisis plague beleaguered Europe, the Arab Spring has all but halted travel to key destinations in the MENA region, and high oil prices continue to strain the finances of airlines already under stress. And the list goes on. Against this backdrop, the achievements of Ahmad Alzabin, chairman and CEO of Kuwait-based Aviation Lease and Finance Company KSCC (Alafco) are all the more impressive. Despite the adverse operating conditions that hindered growth and even threatened survival of companies in the aviation industry, Alafco’s financial performance was not only strong, it was unprecedented. With aircraft leasing expected to account for 50% of the fleets of global airlines by 2015, the sky is the limit for Alzabin’s leasing empire. Robust results across Alafco’s three main business lines—operating lease, sale and leaseback, and aircraft lease management—led to the generation of gross revenues totaling $185.5 million in 2011, a 31% increase on 2010’s figure of just over $142 million. The financial pièce de résistance—a four-fold increase in net profits to $166.9 million up from $38.5 million in 2010. “We are setting up our company for future growth and have had a very good year,” asserts the ambitious Kuwaiti. Alzabin attributes the outstanding financial performance of his company, which currently boasts 48 owned aircraft in its lease portfolio and an additional six under management for investors, to the amendment of aircraft purchase agreements with manufacturers as well as growth in leasing activity.
NBK Capital’s Kuwait In Focus report published last year agrees, “Alafco’s main revenue stream comes from operating leases, effectively turning it into an asset-heavy company.” Total assets for 2011 of $2.06 billion up from $1.9 billion the year before suggest little to the contrary for this aviation leasing frontrunner. Alzabin’s prudent strategic move to put Alafco’s aircraft on long term leasing also mitigated the impact of short term economic and political turbulence and helped the company to success last year. Meanwhile, a strong and stable client base afforded the aviation leasing company an additional layer of security. Alafco’s leading man proved that 2011 was not only a year of limiting risk and maximizing security, but one of growth for his company. Demonstrating its increasing presence in the Middle East, Asia, Europe, Africa, and Latin America, Alafco delivered eight aircraft during the last financial year; one for Caribbean Airlines of Trinidad and Tobago, two for Saudi Arabian Airlines, two for Okay Airways of China and three for Ethiopian Airlines.
