LOS ANGELES–(BUSINESS WIRE)– Air Lease (NYSE: AL) announces financial results for the three months ended March 31, 2025.
“AL had a strong quarter with fleet expansion, healthy sales gains, significant insurance settlements related to our aircraft in Russia, and achieving our target debt to equity ratio which now allows us to consider all capital allocation opportunities. To date, we have no aircraft delivering to any country that has announced reciprocal tariffs applicable to aircraft. We continue to benefit from robust global aircraft demand in both leasing and aircraft trading as significant aircraft supply constraints persist,” said John L. Plueger, Chief Executive Officer and President.
First Quarter 2025 Results
The following table summarizes our operating results for the three months ended March 31, 2025 and 2024 (in millions, except per share amounts and percentages):
Operating Results
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
|
2025 |
|
|
|
2024 |
|
|
$ change |
|
% change |
|
|||
|
Revenues |
$ |
738.3 |
|
|
$ |
663.3 |
|
|
$ |
75.0 |
|
|
11.3 |
% |
|
|
Operating expenses |
|
(598.6 |
) |
|
|
(528.0 |
) |
|
|
(70.6 |
) |
|
13.4 |
% |
|
|
Recoveries of Russian fleet write-off |
|
331.9 |
|
|
|
— |
|
|
|
331.9 |
|
|
— |
|
|
|
Income before taxes |
|
471.7 |
|
|
|
135.3 |
|
|
|
336.4 |
|
|
248.6 |
% |
|
|
Net income attributable to common stockholders |
$ |
364.8 |
|
|
$ |
97.4 |
|
|
$ |
267.4 |
|
|
274.5 |
% |
|
|
Diluted earnings per share |
$ |
3.26 |
|
|
$ |
0.87 |
|
|
$ |
2.39 |
|
|
274.7 |
% |
|
|
Adjusted net income before income taxes(1) |
$ |
169.5 |
|
|
$ |
146.3 |
|
|
$ |
23.2 |
|
|
15.9 |
% |
|
|
Adjusted diluted earnings per share before income taxes(1) |
$ |
1.51 |
|
|
$ |
1.31 |
|
|
$ |
0.20 |
|
|
15.3 |
% |
|
Key Financial Ratios
|
|
Three Months Ended March 31, |
|
||
|
|
2025 |
|
2024 |
|
|
Pre-tax margin |
63.9% |
|
20.4% |
|
|
Adjusted pre-tax margin(1) |
23.0% |
|
22.1% |
|
|
Pre-tax return on common equity (trailing twelve months) |
12.2% |
|
11.2% |
|
|
Adjusted pre-tax return on common equity (trailing twelve months)(1) |
9.0% |
|
11.6% |
|
|
—————————————————————— |
||||
|
(1) Adjusted net income before income taxes, adjusted diluted earnings per share before income taxes, adjusted pre-tax margin and adjusted pre-tax return on common equity have been adjusted to exclude the effects of certain non-cash items, such as non-cash deemed dividends for redemption of preferred stock, and one-time or non-recurring items that are not expected to continue in the future, such as retirement compensation and net write-offs and recoveries related to our former Russian fleet. See note 1 under the Consolidated Statements of Operations included in this earnings release for a discussion of the non-GAAP measures and a reconciliation to their most comparable GAAP financial measures. |
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Highlights
- During the first quarter, we took delivery of 14 aircraft from our orderbook, representing over $800 million in aircraft investments, ending the period with 487 aircraft in our owned fleet and over $32 billion in total assets.
- In March 2025, we recognized a net benefit of $332 million from the settlement with certain insurers of insurance claims related to our former Russian fleet.
- In addition, subsequent to March 31, 2025, we received $226.7 million in cash insurance settlement proceeds. As of May 5, 2025, we have recovered approximately 82% of our write-off.
- Sold 16 aircraft during the first quarter for $521 million in sales proceeds.
- We have approximately $741 million of aircraft in our sales pipeline1, which includes approximately $552 million in flight equipment held for sale as of March 31, 2025 and $189 million of aircraft subject to letters of intent.
- Placed 100% and 89% of our expected orderbook on long-term leases for aircraft delivering through the end of 2026 and 2027, respectively, and placed approximately 58% of our entire orderbook delivering through 2031.
- Ended the quarter with $29.2 billion in committed minimum future rental payments consisting of $18.9 billion in contracted minimum rental payments on the aircraft in our existing fleet and $10.3 billion in minimum future rental payments related to aircraft which will deliver between 2025 through 2031.
- On April 30, 2025, we increased the capacity of our syndicated unsecured revolving credit facility to $8.2 billion with the support of 52 financial institutions and extended the final maturity to May 5, 2029.
- On May 2, 2025, our board of directors approved a quarterly cash dividend of $0.22 per share on our outstanding Class A common stock. This quarterly dividend of $0.22 per share will be paid on July 9, 2025 to holders of record of our Class A common stock as of June 4, 2025.
Financial Overview
Our rental revenues for the three months ended March 31, 2025 increased by approximately 5%, to $645 million, as compared to the three months ended March 31, 2024. Our rental revenues increased primarily due to the continued growth of our fleet, partially offset by a decrease in end of lease revenue of approximately $12.7 million as compared to the prior period primarily due to fewer lease terminations.
Our aircraft sales, trading and other revenues for the three months ended March 31, 2025 increased by 90%, to $93 million, as compared to the three months ended March 31, 2024, primarily driven by an increase in sales activity. We recorded $61 million in gains from the sale of 16 aircraft for the three months ended March 31, 2025, compared to $23 million in gains from the sale of five aircraft for the three months ended March 31, 2024.
Our net income attributable to common stockholders for the three months ended March 31, 2025 was $365 million, or $3.26 per diluted share, as compared to $97 million, or $0.87 per diluted share, for the three months ended March 31, 2024. Net income attributable to common stockholders increased from the prior year period primarily due to a net benefit of $332 million from the settlement of insurance claims with certain insurers related to aircraft detained in Russia, along with higher revenues as discussed above. These were slightly offset by higher interest expense, driven by the increase in our composite cost of funds, as well as a $17.1 million increase in compensation expense, primarily consisting of $9.2 million in selling, general and administrative expense and $7.4 million in stock-based compensation expense, related to the announced retirement of our Executive Chairman.
Adjusted net income before income taxes during the three months ended March 31, 2025 was $169 million, or $1.51 per adjusted diluted share, as compared to $146 million, or $1.31 per adjusted diluted share, for the three months ended March 31, 2024. The increase is primarily due to an increase in our rental revenue and aircraft sales, trading and other revenue as discussed above, partially offset by higher interest expense, driven by the increase in our composite cost of funds.
| ________________________________ | ||
|
1 |
Aircraft in our sales pipeline is as of March 31, 2025, and includes letters of intent and sale agreements signed through May 5, 2025. | |
Flight Equipment Portfolio
As of March 31, 2025, the net book value of our fleet increased to $28.6 billion, compared to $28.2 billion as of December 31, 2024. As of March 31, 2025, we owned 487 aircraft in our aircraft portfolio, comprised of 352 narrowbody aircraft and 135 widebody aircraft, and we managed 57 aircraft. The weighted average fleet age and weighted average remaining lease term of flight equipment subject to operating lease as of March 31, 2025 was 4.7 years and 7.2 years, respectively. We had a globally diversified customer base comprised of 112 airlines in 57 countries as of March 31, 2025.
The following table summarizes the key portfolio metrics of our fleet as of March 31, 2025 and December 31, 2024:
|
|
March 31, 2025 |
|
December 31, 2024 |
|
Net book value of flight equipment subject to operating lease |
$ 28.6 billion |
|
$ 28.2 billion |
|
Weighted-average fleet age(1) |
4.7 years |
|
4.6 years |
|
Weighted-average remaining lease term(1) |
7.2 years |
|
7.2 years |
|
|
|
|
|
|
Owned fleet(2) |
487 |
|
489 |
|
Managed fleet |
57 |
|
60 |
|
Aircraft on order |
260 |
|
269 |
|
Total |
804 |
|
818 |
|
|
|
|
|
|
Current fleet contracted rentals |
$ 18.9 billion |
|
$ 18.3 billion |
|
Committed fleet rentals |
$ 10.3 billion |
|
$ 11.2 billion |
|
Total committed rentals |
$ 29.2 billion |
|
$ 29.5 billion |
|
|
|
|
|
|
|
|
|
|
|
(1) Weighted-average fleet age and remaining lease term calculated based on net book value of our flight equipment subject to operating lease. |
|||
|
(2) As of March 31, 2025 and December 31, 2024, our owned fleet count included 16 and 30 aircraft classified as flight equipment held for sale, respectively, and 16 and 15 aircraft classified as net investments in sales-type leases, respectively, which are all included in Other assets on the Consolidated Balance Sheet. |
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The following table details the regional concentration of our flight equipment subject to operating leases:
|
|
|
March 31, 2025 |
|
December 31, 2024 |
|
Region |
|
% of Net Book Value |
|
% of Net Book Value |
|
Europe |
|
40.8 % |
|
41.4 % |
|
Asia Pacific |
|
36.4 % |
|
35.8 % |
|
Central America, South America, and Mexico |
|
9.7 % |
|
9.5 % |
|
The Middle East and Africa |
|
6.9 % |
|
7.0 % |
|
U.S. and Canada |
|
6.2 % |
|
6.3 % |
|
Total |
|
100.0 % |
|
100.0 % |
The following table details the composition of our owned fleet by aircraft type:
|
|
|
March 31, 2025 |
|
December 31, 2024 |
||||
|
Aircraft type |
|
Number of Aircraft |
|
% of Total |
|
Number of Aircraft |
|
% of Total |
|
Airbus A220-100 |
|
7 |
|
1.4 % |
|
7 |
|
1.4 % |
|
Airbus A220-300 |
|
26 |
|
5.3 % |
|
22 |
|
4.5 % |
|
Airbus A320-200 |
|
20 |
|
4.1 % |
|
23 |
|
4.7 % |
|
Airbus A320-200neo |
|
23 |
|
4.7 % |
|
23 |
|
4.7 % |
|
Airbus A321-200 |
|
19 |
|
3.9 % |
|
19 |
|
3.9 % |
|
Airbus A321-200neo |
|
108 |
|
22.2 % |
|
108 |
|
22.1 % |
|
Airbus A330-200(1) |
|
13 |
|
2.7 % |
|
13 |
|
2.7 % |
|
Airbus A330-300 |
|
5 |
|
1.0 % |
|
5 |
|
1.0 % |
|
Airbus A330-900neo |
|
28 |
|
5.7 % |
|
28 |
|
5.7 % |
|
Airbus A350-900 |
|
17 |
|
3.5 % |
|
17 |
|
3.5 % |
|
Airbus A350-1000 |
|
8 |
|
1.6 % |
|
8 |
|
1.6 % |
|
Boeing 737-700 |
|
2 |
|
0.4 % |
|
2 |
|
0.4 % |
|
Boeing 737-800 |
|
48 |
|
9.9 % |
|
61 |
|
12.5 % |
|
Boeing 737-8 MAX |
|
67 |
|
13.8 % |
|
59 |
|
12.1 % |
|
Boeing 737-9 MAX |
|
31 |
|
6.4 % |
|
30 |
|
6.1 % |
|
Boeing 777-200ER |
|
1 |
|
0.2 % |
|
1 |
|
0.2 % |
|
Boeing 777-300ER |
|
24 |
|
5.0 % |
|
24 |
|
4.9 % |
|
Boeing 787-9 |
|
26 |
|
5.3 % |
|
26 |
|
5.3 % |
|
Boeing 787-10 |
|
13 |
|
2.7 % |
|
12 |
|
2.5 % |
|
Embraer E190 |
|
1 |
|
0.2 % |
|
1 |
|
0.2 % |
|
Total(2) |
|
487 |
|
100.0 % |
|
489 |
|
100.0 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) As of March 31, 2025 and December 31, 2024, aircraft count includes two Airbus A330-200 aircraft classified as freighters. |
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|
(2) As of March 31, 2025 and December 31, 2024, our owned fleet count included 16 and 30 aircraft classified as flight equipment held for sale, respectively, and 16 and 15 aircraft classified as net investments in sales-type leases, respectively, which are all included in Other assets on the Consolidated Balance Sheet. |
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Debt Financing Activities
We ended the first quarter of 2025 with total debt financing, net of discounts and issuance costs, of $19.9 billion. As of March 31, 2025, 77.6% of our total debt financing was at a fixed rate and 97.3% was unsecured. As of March 31, 2025, our composite cost of funds was 4.26%. We ended the quarter with total liquidity of $7.4 billion.
As of the end of the periods presented, our debt portfolio was comprised of the following components (dollars in millions, except percentages):
|
|
March 31, 2025 |
|
December 31, 2024 |
|
Unsecured |
|
|
|
|
Senior unsecured securities |
$ 14,624 |
|
$ 16,047 |
|
Term financings |
3,808 |
|
3,629 |
|
Commercial paper |
889 |
|
— |
|
Other revolving credit facilities |
200 |
|
— |
|
Revolving credit facility |
— |
|
170 |
|
Total unsecured debt financing |
19,521 |
|
19,846 |
|
Secured |
|
|
|
|
Term financings |
351 |
|
354 |
|
Export credit financing |
186 |
|
190 |
|
Total secured debt financing |
537 |
|
544 |
|
|
|
|
|
|
Total debt financing |
20,058 |
|
20,390 |
|
Less: Debt discounts and issuance costs |
(167) |
|
(180) |
|
Debt financing, net of discounts and issuance costs |
$ 19,891 |
|
$ 20,210 |
|
Selected interest rates and ratios: |
|
|
|
|
Composite interest rate(1) |
4.26 % |
|
4.14 % |
|
Composite interest rate on fixed-rate debt(1) |
3.90 % |
|
3.74 % |
|
Percentage of total debt at a fixed-rate |
77.63 % |
|
79.00 % |
|
|
|
|
|
|
|
|
|
|
|
(1) This rate does not include the effect of upfront fees, facility fees, undrawn fees or amortization of debt discounts and issuance costs. |
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Conference Call
In connection with this earnings release, Air Lease will host a conference call on May 5, 2025 at 4:30 PM Eastern Time to discuss the Company’s financial results for the first quarter of 2025.
Investors can participate in the conference call by dialing 1 (800) 715-9871 domestic or 1 (646) 307-1963 international. The passcode for the call is 4869598.
The conference call will also be broadcast live through a link on the Investors page of the Air Lease website at www.airleasecorp.com. Please visit the website at least 15 minutes prior to the call to register, download and install any necessary audio software. A replay of the broadcast will be available on the Investors page of the Air Lease website.
For your convenience, the conference call can be replayed in its entirety beginning on May 5, 2025 until 11:59 PM ET on May 12, 2025. If you wish to listen to the replay of this conference call, please dial 1 (800) 770-2030 domestic or 1 (647) 362-9199 international and enter passcode 4869598.
