Air Lease Corporation Activity Update for the First Quarter of 2024
- 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.
- None.
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.
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.
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.
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
Sales
- Sold five aircraft to third-party buyers.
-
Aircraft sales proceeds for the quarter totaled approximately
$240 million
Financing
-
Issued
$500 million 5.10% senior unsecured medium-term notes due 2029. -
Issued
C of$400 million 5.40% senior unsecured medium-term notes due 2028. -
Issued
€600 million of3.70% 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
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
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