Half-year Report

AVATION PLC

("Avation" or "the Company")

Financial Results and Interim Management Statementfor the SIX MONTHS ended 31 December 2018

Avation PLC (LSE: AVAP), the commercial passenger aircraft leasing company, announces reviewed financial results for the six months ended 31 December 2018.

Key Financial Results

· Total profit after tax increased by 102% year on year to $13.6 million;

· Earnings per share ("EPS") increased 97% to 21.6 cents;

· Lease rental revenue increased by 40% to a record $58.2 million;

· Total assets increased by 9% since 30 June 2018 to a record $1,256.1 million; and

· Weighted average cost of debt declined from 5.0% to 4.9%.

Operational Highlights

· Four aircraft acquired during the period;

· Sale of one narrowbody Airbus A321-200 aircraft;

· Growth confirmed through an order of four Airbus A220-300 aircraft to be delivered to airBaltic by 30 June 2019;

· Order placed for eight additional ATR72-600 aircraft to be delivered by 2022;

· Airline customers increased from thirteen to fourteen; and

· $50 million senior unsecured notes issued under the Global Medium Term Note programme.

Executive Chairman, Jeff Chatfield, said:

"Avation posted record revenue, profit and total assets for the period ended 31 December 2018. The Company generated a strong first half result with profit and EPS approximately double that of the comparable half year period.

"Avation acquired four aircraft during the period and is expected to deliver seven additional new aircraft into the fleet prior to 30 June 2019, including four Airbus A220-300 jets to be delivered to airBaltic.

 "Avation sold one narrowbody Airbus A321-200 aircraft during the period at a price more than 10% above book value. Avation has a further seven Airbus A321-200 aircraft in the fleet and narrowbody aircraft represent almost half of the fleet by value. This confirms Avation's fleet is both liquid and supports management's view that the group's net realisable value exceeds the reported net asset value per share.

"The Company repaid all existing junior debt and selected senior debt resulting in the number of unencumbered aircraft at the end of the period increasing to nine.

"The Company's strong performance enabled the Board to declare and pay an interim dividend of 2.0 US cents per share for the period.

"Avation ends the financial period with a strong cash position and seven additional new aircraft expected to be delivered prior to 30 June 2019. The Company believes it has sufficient liquidity to fund further fleet growth and is currently assessing a number of assets for acquisition."

Financial Highlights

1. Fleet assets are defined as property, plant and equipment plus assets held for sale plus finance lease receivables.

2. Net asset value per share is total equity divided by the total number of shares in issue at period end.

3. Based on GBP:USD exchange rate as at 31 December 2018 of 1.273 (30 June 2018 : 1.321).

Aircraft Fleet

As at 31 December 2018, Avation's fleet comprised 41 aircraft, including seven aircraft on finance lease. The weighted average age of the fleet (excluding finance leases) is 3.6 years (30 June 2018: 3.2 years) and the weighted average remaining lease term is 7.5 years (30 June 2018: 7.7 years).

Fleet assets increased 2% to $1,064.0 million (30 June 2018: $1,038.6 million). Four aircraft were added to the fleet in the period including three ATR72-600 aircraft and one Airbus A220-300. One narrowbody Airbus A321-200 aircraft was sold during the period. Narrowbody aircraft make up 42.6% of fleet assets as at 31 December 2018.

Avation is expected to add seven aircraft to the fleet prior to 30 June 2019 with four Airbus A220-300 and three ATR 72-600 turboprop aircraft on order for delivery.

In addition to this, Avation has ordered eight ATR 72-600 aircraft for delivery by 2022 and has purchase rights for a further 25 aircraft.

Debt summary

1. Net debt to equity is defined as net indebtedness divided by total equity.

2. Weighted average cost of secured debt is the weighted average interest rate for secured loans and borrowings as at the period end.

3. Weighted average cost of total debt is the weighted average interest rate for total loans and borrowings as at the period end.

The weighted average cost of total debt decreased to 4.9% as at 31 December 2018 (30 June 2018: 5.0%).

The weighted average cost of secured debt decreased to 4.1% at 31 December 2018 (30 June 2018: 4.3%) principally due to settlements of certain higher cost secured loans following the issuance of $300 million 6.5% Senior Notes due 2021 under the Company's Global Medium Term Note programme ("Notes") in May 2018. Avation completed a tap issue of an additional $50 million in Notes in November 2018.

At the end of the financial period, Avation's net debt to equity ratio was 3.6 (30 June 2018: 3.6). At 31 December 2018, 96.4% of total debt was at fixed or hedged interest rates (30 June 2018: 94.8%). The proportion of unsecured debt to total debt was 35.7% (30 June 2018: 33.8%).

Avation will continue to source secured and unsecured debt finance to fund fleet growth with the overriding objective of lowering the weighted average cost of finance.

Credit Rating

In November 2018, Standard & Poor's Global Ratings advised that Avation's issue rating for the Notes had been upgraded. The Company's current credit ratings are as follows:

Dividend Policy

In recognition of robust trading conditions, the Board declared and paid an interim dividend of 2.0 US cents per share in respect of the six months ended 31 December 2018.

The Company confirms its aim to maintain a progressive dividend policy.

Market Positioning

Avation's strategy is to target growth and diversification by adding new airline customers, while maintaining strong average aircraft age and remaining lease term metrics. Avation focuses on new and relatively new commercial passenger aircraft on long-term leases. Avation is able to own, manage and lease turboprop, narrowbody and twin-aisle aircraft to the airline industry.

The Company's business model involves rigorous investment criteria and has a history of delivering consistent profitability while seeking to mitigate the risks associated with the aircraft leasing sector. Avation will typically sell mid-life and older aircraft and redeploy capital to newer assets. This approach is intended to mitigate technology change risk, operational and financial risk, support sustained growth and deliver long-term shareholder value.

Avation is an active trader of aircraft and from time to time will consider the acquisition or sale of individual or smaller portfolios of aircraft, based on prevailing market opportunities and consideration of risk and revenue concentrations.

Interim Management Statement

The outlook for the second half of the 2019 financial year is for continued fleet growth with the expected delivery of seven ordered aircraft and the potential acquisition of further assets.

Management believes that the risks associated with its portfolio of assets have been reduced through growth and diversification of customers that has been achieved during the financial period. Avation has demonstrated that it has the capability to acquire, finance and deliver a number of aircraft in a short period of time when the opportunity presents itself and has a platform which supports future growth.

Management believes that it can attract airline customers, acquire aircraft and obtain the required funding for growth. In addition to operational cash flows, funding is traditionally sourced from capital markets, asset-backed bank lending and disposal of selected aircraft. Access to acceptably priced funding is a risk, which is common to all capital-intensive businesses. Specific risks which are inherent to the aircraft leasing industry include, but are not limited to, the creditworthiness of customer airlines, over-production of new aircraft and market saturation, technology change, residual value risks, competition from other lessors and the risk of impairment of aircraft assets.

Avation's Board of Directors is pleased to deliver a record financial result from its aircraft leasing business during this period of diversification and growth.

Results Conference Call

Avation's senior management team will host a conference call on 21 February 2019, at 1pm GMT (UK) / 8am EST (US) / 9pm SGT (Singapore), to discuss the Company's financial results. Participants should dial: United Kingdom 020 3059 5868; United States +1 866 796 1566; Singapore +65 3157 6417; other locations +44 20 3059 5868 and quote "Avation Half Year 2019 Results" when prompted. The conference call will also be webcast live through the following link:

http://avation.emincote.com/results/2019halfyearresults

To view the webcast investors will be invited to register their name and email address, participants can do this in advance or on the day. A replay of the webcast will be available on the Investor Relations page of the Avation website.

Forward Looking Statements

This release contains certain "forward looking statements". Forward looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "estimates," "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for Avation's future business and financial performance. Forward looking statements are based on management's current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks. Further information on the factors and risks that may affect Avation's business is included in Avation's regulatory announcements from time to time, including its Annual Report, Full Year Financial Results and Half Year Results announcements. Avation expressly disclaims any obligation to update or revise any of these forward looking statements, whether because of future events, new information, a change in its views or expectations, or otherwise.

- ENDS-

More information on Avation PLC can be found at: www.avation.net

Enquiries:

AVATION PLC

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

AVATION PLC

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

AVATION PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2018

Other reserves consist of capital redemption reserve, warrant reserve, fair value reserve and foreign currency translation reserve.

AVATION PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

AVATION PLC

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

This interim condensed consolidated financial statements for Avation PLC for the six months ended 31 December 2018 were authorised for issue in accordance with a resolution of the Directors on 20 February 2019.

1 CORPORATE INFORMATION

Avation PLC is a public limited company incorporated in England and Wales under the Companies Act 2006 (Registration Number 05872328) and is listed as a Standard Listing on the London Stock Exchange.

The Group's principal activity is aircraft leasing.

2 BASIS OF PREPARATION AND ACCOUNTING POLICIES

These interim condensed consolidated financial statements have been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the Financial Conduct Authority and in accordance with International Accounting Standard (IAS) 34 'Interim Reporting'.

The interim condensed consolidated financial statements do not include all the notes of the type normally included within the annual report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financial and investing activities of the consolidated entity as the annual report.

It is recommended that the interim condensed consolidated financial statements be read in conjunction with the annual report for the year ended 30 June 2018 and considered together with any public announcements made by Avation PLC during the six months ended 31 December 2018.

The accounting policies and methods of computation are the same as those adopted in the annual report for the year ended 30 June 2018 except for the adoption of new accounting standards effective as of 1 July 2018.

The Group has applied IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments for the first time in these interim condensed consolidated financial statements. As required by IAS 34, the nature and effect of these changes are disclosed in Note 3b.

Several other amendments and interpretations which apply for the first time in the six months ended 31 December 2018 do not have an impact on the Group's interim condensed consolidated financial statements.

The preparation of the interim condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported income and expenses, assets and liabilities and disclosure of contingencies at the date of the Interim Report, actual results may differ from these estimates.

The statutory financial statements of Avation PLC for the year ended 30 June 2018, which carried an unqualified audit report, have been delivered to the Registrar of Companies and did not contain any statements under section 498 of the Companies Act 2006.

The interim condensed consolidated financial statements are unaudited and reviewed by the auditors.

The interim condensed consolidated financial statements do not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006.

3 NEW STANDARDS AND INTERPRETATIONS NOT APPLIED AND STANDARDS IN EFFECT IN 2018

(a) New standards and interpretations not applied

The IASB and IFRIC have issued the following standards and interpretations with an effective date after the date of these financial statements.

The Group intends to apply these standards and interpretations when they become effective.

International Accounting Standards (IAS/IFRS) Effective Date

(accounting periods

commencing after)

IFRS 16 Leases 1 January 2019

IFRIC interpretation 23 Uncertainty over insurance tax treatment 1 January 2019

Amendments to IFRS 9 Prepayment feature of negative

compensation 1 January 2019

Amendments to IAS 19 Plan amendment, curtailment or

settlement 1 January 2019

Amendments to IAS 28 Long term interests in associates and

Joint ventures 1 January 2019

Annual improvements 2015-2017 cycle (issued in December 2017)1 January 2019

IFRS 17 Insurance contracts 1 January 2021

Amendments to IFRS 10 and IAS 28 Sale or contribution of assets

between an investor and its associates or joint venture To be determined

The Directors do not expect that the adoption of the Standards listed above will have a material impact on the Group in future periods.

3 NEW STANDARDS AND INTERPRETATIONS NOT APPLIED AND STANDARDS IN EFFECT IN 2018 (continued) 

(b) Standard in effect in 2018

The Group has adopted all new standards that have come into effect during the six months ended 31 December 2018.

Changes in accounting policies

The Group adopted IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments on 1 July 2018. The changes in accounting policies are as follows:

IFRS 15 Revenue from Contracts with Customers

Under IFRS 15, revenue is recognised at an amount that reflects the consideration which an entity expects to be entitled to in exchange for transferring goods or services to a customer. IFRS 15 specifically states that lease contracts within the scope of IFRS 16 Leases are outside the scope of this standard. As the Group derives its revenue primarily from lease rentals under lease contracts within the scope of IFRS 16 Leases, the adoption of this standard did not have a material impact on the financial statements of the Group for the period ended 31 December 2018.

IFRS 9 Financial Instruments

IFRS 9 Financial Instruments, which replaces IAS 39 Financial Instruments: Recognition and Measurement for annual periods beginning or after 1 January 2018, brings together all three aspect of the accounting for financial instrument classification and measurement; impairment, and hedge accounting.

With the exception of hedge accounting which the Group applied prospectively, the Group has applied IFRS 9 retrospectively, with the initial application date of 1 July 2018.

The Group has not restated comparative information for prior periods as there is no material impact from the implementation of IFRS 9.

a) Classification and measurement

Except for certain trade receivables, under IFRS 9, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

Under IFRS 9, debt financial instruments are subsequently measured at fair value through profit and loss (FVPL), amortised cost, or fair value through other comprehensive income (FVOCI). The classification is based on two criteria: the Group's debt model for managing the assets; and whether the instruments' contractual cash flows represent 'solely payments of principal and interest' on the principal amount outstanding (the 'SPPI criterion').

The assessment of the Group's business models was made as of the date of initial application, 1 July 2018. The assessment of whether contractual cash flows on debt instruments solely comprised principal and interest was made based on the facts and circumstances as at the initial recognition of the assets.

3 NEW STANDARDS AND INTERPRETATIONS NOT APPLIED AND STANDARDS IN EFFECT IN 2018 (continued) 

Trade and other receivables and finance lease receivables which were classified as loans and other receivables under IAS 39, are classified as financial assets measured at amortised cost under IFRS 9.

The accounting for the Group's financial liabilities remains largely the same as it was under IAS 39. Similar to the requirements of IAS 39, IFRS 9 requires contingent consideration liabilities to be treated as financial instruments measured at fair value, with the changes in fair value recognised in the statement of profit or loss.

The Group recognised a day-one gain of US$0.4m related to a current debt modification during this 6 month period. There is no material impact from historical debt modifications and no adjustments have been made to the comparative information for prior periods.

b) Impairment

The adoption of IFRS 9 has fundamentally changed the Group's accounting for impairment losses for financial assets by replacing IAS 39's incurred loss approach with a forward-looking expected credit loss (ECL) approach.

IFRS 9 requires the Group to record an allowance for ECLs for all loans and other debt financial assets not held at FVPL.

ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive. The shortfall is then discounted at an approximation to the asset's original effective interest rate.

For trade and other receivables, the Group has applied the standard's simplified approach and has calculated ECLs based on lifetime expected losses. The Group has established a provision matrix based on the Group's historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

The adoption of the ECL requirements of IFRS 9 did not result in a change in impairment allowances for the Group's debt financial assets in current and prior periods.

c) Hedge accounting

The Group applied the hedge accounting requirements of IFRS 9 prospectively. At the date of initial application all of the Group's existing hedging relationships were eligible to be treated as continuing hedge relationships. The change did not have a significant impact on the current hedging relationships entered into by the Group.

3 NEW STANDARDS AND INTERPRETATIONS NOT APPLIED AND STANDARDS IN EFFECT IN 2018 (continued)

Finance lease

A finance lease is a lease that the Group as the lessor uses to transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee, At the commencement of the lease term, the Group recognises the minimum lease amounts receivable by the Group as a finance lease receivable and records the unguaranteed residual value as an asset within the same category. The difference between (a) the aggregate of the minimum lease amounts and the unguaranteed residual value and (b) their present value (presented in the statement of financial position as finance lease receivables-net) is recognised as unearned finance income. Minimum lease amounts are the payments over the lease term that the lessee is or can be required to make plus any residual value guaranteed to the lessor by the lessee, or a party unrelated to the lessor.

Unearned finance lease is allocated to each period during the lease term using the effective interest method that allocates each rental between finance income and repayment of capital in each accounting period in such a way that finance income is recognised as a constant periodic rate of return (implicit effective interest rate) on the lessor's net investment in the lease. Lease agreements for which the base rent is based on the floating interest rate existing are included in minimum lease payments based on the floating interest rate existing at the commencement of the lease; any increase or decrease in lease payments that result (from subsequent changes on floating interest rate is recorded as an increase or a decrease in finance lease income in the period of the interest rate change. The accounting policies for interest income from finance leases is detailed in the annual report for the year ended 30 June 2018.

4 FAIR VALUE MEASUREMENT

The fair value of a financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable and willing parties in an arm's length transaction, other than a forced or liquidation sale.

The carrying amounts of cash and cash equivalents, trade and other receivables, finance lease receivables - current, trade and other payables - current and loans and borrowings - current are a reasonable approximation of fair value either due to their short-term nature or because the interest rate charged closely approximates market interest rates or that the financial instruments have been discounted to their fair value at a current pre-tax interest rate.

The fair values (other than the unsecured notes) above are estimated by discounting expected future cash flows at market incremental leading rate for similar types of lending, borrowing or leasing arrangements at the end of the reporting period. The fair value of the unsecured notes is based on level 1 quoted prices (unadjusted) in active market that the Group can access at measurement date.

4 FAIR VALUE MEASUREMENT (continued)

Non-financial assets measured at fair value:

Aircraft were valued at 30 June 2018. Refer to Note 11 for the details on the valuation technique and significant inputs used in the valuation.

Classification of financial instruments:

A comparison by category of carrying amounts of all the Group's financial instruments that are carried in the financial statements which are considered to equate to fair value is set out below.

5 REVENUE

Geographical analysis

6 OTHER INCOME

7 OTHER EXPENSES

8 FINANCE INCOME

9 FINANCE EXPENSES

10 RELATED PARTY TRANSACTIONS

Significant related party transactions:

11 PROPERTY, PLANT AND EQUIPMENT

11 PROPERTY, PLANT AND EQUIPMENT (continued)

11 PROPERTY, PLANT AND EQUIPMENT (continued)

Additions and Disposals

During the six months ended 31 December 2018, the Group acquired one narrow-body jet aircraft and three turboprop aircraft of which two turboprop aircraft were reclassified as held under finance leases.

Valuation

The Group's aircraft were valued in June 2018 by independent valuers on lease-encumbered basis ("LEV'). LEV takes into account the current lease arrangements for the aircraft and estimated residual values at the end of the lease. These amounts have been discounted to present value using discount rates of 6.5% per annum for jet aircraft and 8.1% per annum for turboprop aircraft. Different discount rates are considered appropriate for different aircraft based on their respective risk profiles.

Geographical analysis

12 TRADE AND OTHER RECEIVABLES

During the six months ended 31 December 2018, the Group exercised the 2 options previously classified as options held for trading and reclassified the US$2 million to deposits for aircraft.

13 FINANCE LEASE RECEIVABLES

Future minimum lease payments receivable under finance leases are as follows:

14 GOODWILL

The Group performs its annual impairment test in June and when circumstances indicate the carrying value may be impaired. For the purpose of these financial statements there was no indication of impairment. The key assumptions used to determine the recoverable amount for the different cash generating units were disclosed in the annual consolidated financial statements for the year ended 30 June 2018.

15 DERIVATIVE FINANCIAL INSTRUMENTS

Hedge accounting has been applied for interest rate swap contracts which have been designated as cash flow hedges. The Group pays fixed rates of interest of 1.57% to 2.63% per annum and receives floating rate interest payments pegged to US$ LIBOR under the interest rate swap contracts. The swap contracts mature between 23 September 2021 and 22 December 2028.

Changes in the fair values of these interest rate swap contracts are recognised in the fair value reserve. The net fair value loss of US$4.37 million (31 December 2017: gain of US$1.87 million) on these derivative financial instruments was recognised in the fair value reserve for the six months ended 31 December 2018.

The fair value of the derivative financial instruments is determined by reference to marked-to-market values provided by counterparties. The fair value measurement of all derivative financial instruments for the Group is classified under Level 2 of the fair value hierarchy, for which inputs other than quoted prices that are observable for the asset or liability, either directly as prices or indirectly derived from prices are included as inputs for the determination of fair value.

16 CASH AND BANK BALANCES

The Group's restricted cash and bank balances have been pledged as security for certain loan obligations.

In the consolidated statement of cash flows, cash and cash equivalents comprises unrestricted cash and bank balances.

17 ASSETS HELD FOR SALE AND LIABILITIES DIRECTLY ASSOCIATED WITH ASSETS HELD FOR SALE

As at 31 December 2018, the Group's aircraft which met the criteria to be classified as assets held for sale and the associated liabilities were as follows:

During the six months ended 31 December 2018, the Group sold the aircraft held for sale.

The gain on disposal of aircraft of US$6.5 million substantially includes the gain on recognition of finance lease for two aircraft of US$0.9 million and a gain from aircraft held for sale of US$5.2 million.

18 SHARE CAPITAL AND TREASURY SHARES

(a) Share capital

During the six months period ended 31 December 2018, the Company issued 1,721,690 ordinary shares of 1 penny each at 130p following the exercise of warrants by warrant holders raising total gross proceeds of US$ 2.87m.

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions.

As at 31 December 2018, there are nil shares held as treasury shares (30 June 2018: nil).

18 SHARE CAPITAL AND TREASURY SHARES (continued)

(b) Net asset value per share

(1) Net asset value per share is total equity divided by the total number of shares in issue at period end.

(2) Based on GBP:US$ exchange rate as at 31 Dec 2018 of 1.273 (30 June 2018: 1.321).

19 LOANS AND BORROWINGS

During the six months ended 31 December 2018, the Group issued US$ 50 million 6.5% Senior Notes due 2021 under the Group's Global Medium-Term Note Programme. The Notes are listed on the Singapore Exchange (SGX).

Secured borrowings are secured by first ranking mortgages over the relevant aircraft, security assignments of the Group's rights under leases and other contractual agreements relating to the aircraft, charges over bank accounts in which lease payments relating to the aircraft are received and charges over the issued share capital of certain subsidiaries.

Junior secured borrowings are secured by second ranking aircraft mortgages, security assignments and charges over bank accounts.

20 MAINTENANCE RESERVES

21 CAPITAL COMMITMENTS

Capital expenditure contracted for at the reporting date but not recognised in the financial statements is as follows:

Capital commitments represent amounts due under contracts entered into by the group to purchase aircraft. The company has paid deposits towards the cost of these aircraft which are included in trade and other receivables.

As at 31 December 2018, the Group has commitments to purchase eleven ATR 72-600 aircraft and four Airbus A220-300 aircraft from the manufacturers with expected delivery dates from March 2019 to September 2023.

22 CONTINGENT LIABILITIES

There were no material changes in contingent liabilities since 30 June 2018.

23 DIVIDENDS

No dividends have been declared subsequent to 31 December 2018.

24 SUBSEQUENT EVENTS

On 18 January 2019, the Group signed lease with a South-Asian airline for the supply of one new ATR 72-600 aircraft for a term of 8 years.

PRINCIPAL RISKS

The Group's risk management processes bring greater judgement to decision making as they allow management to make better, more informed and more consistent decisions based on a clear understanding of risk involved. We regularly review the risk assessment and monitoring process as part of our commitment to continually improve the quality of decision-making across the Group.