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June 19, 2024
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Aercap is the largest aircraft lessor, giving it a role as industry bellwether.

“AerCap continued its strong performance during the first quarter. Our business is performing very well, and the demand for our aviation assets remains robust,” said Aengus Kelly, Chief Executive Officer of AerCap. “During the quarter, we generated adjusted net income of $658 million and adjusted earnings per share of $3.29, as well as operating cash flow of $1.4 billion. As a result of this strong start to the year, we are raising our earnings guidance for the full year 2024.”

AerCap Holdings delivered a strong 1Q24 financial performance, beating analyst expectations.  The company is increasing its full-year adjusted earnings per share guidance to about $9.20. AerCap’s portfolio through 1Q24  consisted of 3,427 aircraft, engines, and helicopters that were owned, on order, or managed. The average age of owned fleet was 7.4 years (4.6 years for new technology aircraft, 14.4 years for current technology aircraft) and the average remaining contracted lease term was 7.2 years.

An interesting sidebar to the results was CEO Kelly’s comments on Embraer attempting to enter the segment now called the duopoly.  “I doubt we’ll see anything in material numbers before the end of the 2030s. It’s just impossible to develop a new aircraft, particularly if you need a new engine technology, you would have to be well down the track already to have that delivering this side of 2030. So that’s not happening,” he told analysts.  This view comports with what we see – Embraer has frozen its Enegia line as it waits for appropriate powerplants. Its foray into large aircraft, as witnessed by the C-390, is also likely only to be followed up with a far more reliable customer base.

That said, this is boom time for aircraft lessors. Demand is high, supply is tight, and this combination looks to remain in place for at least five years. Airlines, being so competitive, are vying for the latest aircraft. This has happened for some time—airlines that go out of business see their fleets snapped up and redeployed.

Moreover, lessor consolidation serves to tighten further the control big lessors have. We expect to see similar results from the other lessors as they report.

author avatar
Addison Schonland
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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