Air Lease Corporation Activity Update for the First Quarter of 2024

Rhea-AI Summary

Air Lease (NYSE: AL) provided an update on aircraft investments, sales, and financing activities in the first quarter of 2024. The company's fleet consisted of 472 owned aircraft and 73 managed aircraft, with 320 new aircraft on order from Boeing and Airbus. ALC delivered 14 new aircraft, sold five aircraft, and issued a total of $1.5 billion in senior unsecured medium-term notes.

Positive

• ALC's fleet comprised 472 owned aircraft and 73 managed aircraft as of March 31, 2024.
• The company has 320 new aircraft on order from Boeing and Airbus, scheduled for delivery through 2028.
• ALC delivered 14 new aircraft in the first quarter of 2024, including models from Airbus and Boeing.
• The company sold five aircraft to third-party buyers, generating approximately $240 million in proceeds.
• ALC issued a total of $1.5 billion in senior unsecured medium-term notes with varying interest rates and maturity dates.

Negative

• None.

Insights

Financial Analyst

The update from Air Lease Corporation (ALC) indicates significant capital deployment in their fleet expansion, with 14 new aircraft added and a substantial order book. The investment of approximately $900 million in new aircraft suggests a bullish outlook on future demand for leased aircraft. The sales of five aircraft, resulting in proceeds of around $240 million, reflect a strategic portfolio management, possibly aiming at optimizing the age and composition of the fleet.

The issuance of senior unsecured medium-term notes across different currencies and totaling $1.5 billion showcases ALC's active capital management strategy. The varying interest rates, reflective of the different credit markets and currency risks, indicate ALC's approach to diversifying its debt profile and capitalizing on global investor appetite. This move could be seen as a way to lock in capital for future investments or to refinance existing debt under favorable terms.

Market Research Analyst

The aircraft leasing industry is closely tied to the health of the global aviation sector. ALC’s aggressive fleet expansion, with 320 new aircraft on order, is a significant bet on the continued growth of air travel post-pandemic. The specific focus on fuel-efficient models like the Airbus A320neo and A321neos, as well as the Boeing 737-8s, aligns with airline customer demands for more environmentally friendly and cost-effective aircraft.

Investors should note the long-term delivery schedule, set through 2028, which provides a clear growth trajectory but also carries execution risk, including potential delays from manufacturers or shifts in market demand. The reported sales activities also suggest a dynamic approach to fleet management, which could help ALC maintain a competitive edge in terms of fleet age and technology.

Economist

The issuance of medium-term notes in different currencies is a strategic move that may hedge against currency fluctuations, especially relevant given the international nature of the aircraft leasing business. The interest rates on these notes are indicative of the current economic environment and ALC's creditworthiness. The rate of 5.10% for USD, 5.40% for CAD and 3.70% for EUR reflect both the baseline interest rates in each economic zone and the risk premium investors demand for ALC's credit.

ALC's financial activities must be seen in the context of global economic conditions, including interest rate trends and currency exchange rates. The company's ability to secure financing at these rates suggests confidence among investors, but also points to the cost of capital in a potentially rising interest rate environment, which could impact future profitability and cash flows.

LOS ANGELES--(BUSINESS WIRE)-- Today Air Lease Corporation (NYSE: AL) announced an update on aircraft investments, sales, and significant financing activities occurring in the first quarter of 2024.

As of March 31, 2024, ALC’s fleet was comprised of 472 owned aircraft and 73 managed aircraft, with 320 new aircraft on order from Boeing and Airbus set to deliver through 2028.

Aircraft Investments

• Delivered 14 new aircraft from ALC’s order book including two Airbus A220s, one Airbus A320neo, six Airbus A321neos, one Airbus A350-1000, and four Boeing 737-8s.
• Aircraft investments in the quarter totaled approximately $900 million, with the majority occurring in the second half of the quarter.

Sales

• Sold five aircraft to third-party buyers.
• Aircraft sales proceeds for the quarter totaled approximately $240 million.

Financing

• Issued $500 million of 5.10% senior unsecured medium-term notes due 2029.
• Issued C$400 million of 5.40% senior unsecured medium-term notes due 2028.
• Issued €600 million of 3.70% senior unsecured medium-term notes due 2030.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on current expectations and projections about our future results, prospects and opportunities and are not guarantees of future performance. Such statements will not be updated unless required by law. Actual results and performance may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors, including those discussed in our filings with the Securities and Exchange Commission.

About Air Lease Corporation (NYSE: AL)

Air Lease Corporation is a leading global aircraft leasing company based in Los Angeles, California that has airline customers throughout the world. ALC and its team of dedicated and experienced professionals are principally engaged in purchasing new commercial aircraft and leasing them to its airline customers worldwide through customized aircraft leasing and financing solutions. The company routinely posts information that may be important to investors in the “Investors” section of its website at www.airleasecorp.com. Investors and potential investors are encouraged to consult Air Lease Corporation’s website regularly for important information. The information contained on, or that may be accessed through, ALC’s website is not incorporated by reference into, and is not a part of, this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240409223108/en/

Investors:

Jason Arnold

Vice President, Investor Relations

Email: investors@airleasecorp.com

Media:

Laura Woeste

Senior Manager, Media and Investor Relations

Email: press@airleasecorp.com

Ashley Arnold

Senior Manager, Media and Investor Relations

Email: press@airleasecorp.com

Source: Air Lease Corporation

FAQ

How many owned aircraft did ALC have as of March 31, 2024?

ALC had 472 owned aircraft as of March 31, 2024.

How many new aircraft does ALC have on order from Boeing and Airbus?

ALC has 320 new aircraft on order from Boeing and Airbus.

How many new aircraft did ALC deliver in the first quarter of 2024?

ALC delivered 14 new aircraft in the first quarter of 2024.

How much did ALC generate from aircraft sales in the first quarter?

ALC generated approximately $240 million from aircraft sales in the first quarter.

What was the total amount of senior unsecured medium-term notes issued by ALC?

ALC issued a total of $1.5 billion in senior unsecured medium-term notes.