Singapore-based lessor Avation plans to remove two jets and three turboprops from its biggest customer Virgin Australia after finding new homes for the aircraft.

Avation has entered into agreements to lease two of the former Virgin Australia ATR 72-500s to an undisclosed commercial airline in Australia until the end of 2021.

In addition, the lessor has signed a conditional letter of intent for one formerly Virgin Australia-operated ATR 72-500 aircraft with an undisclosed airline customer for an operating lease period of five years.

The deals for all three turboprops are at “current market lease rates”, Avation says.

Jeff Chatfield, executive chairman of Avation, tells Cirium the lessor had six ATR 72-500s at Virgin Australia.

“Three are placed [and] three are still with VAH, presumably to be placed at some point,” he says, adding: “We are optimistic on our five -600s staying.”

Avation has also entered into finance leases for the sale its last two remaining Fokker 100 aircraft over the period to September 2020 at a price 6% above book value.

In a 19 June press release, Chatfield said: “We are optimistic that Virgin Australia will be sold by the administrator and that the eventual buyer should see the value in maintaining and indeed growing the regional network using Avation’s remaining ATR 72-600s as a part of the future business. We feel it prudent to mitigate our overall risk by selling down and transitioning certain of the aircraft given the uncertainty that surrounds the present Covid-19 environment.”

He adds: “Given this unusual and disrupted environment, Avation is pleased and grateful that its marketing team was able to establish a lease with new client.”