AerCap reported a record third quarter on October 27 with revenue up to $1.1bn, with $649million net income ($646 million when including the insurance gain on Aeroflot assets). AerCap generated an adjusted EPS of $2.81, its highest quarterly EPS since the closing of the GECAS acquisition. Basic lease rents were $1.575 million, an increase of $13 million from last quarter, reflecting strong cash collections, and power by the hour rents.
AerCap chief executive Aengus Kelly again reiterating the strength of the lessor’s trading portfolio by selling older assets for significant gains, utilising the profits to buy back stock. AerCap has reauthorised another $500 million round of share repurchases, which once complete will result in a total repurchase of 18.5% of the company.
Aengus Kelly reported sales of $682 million aiding unlevered margins to 24%, while also improving the overall average fleet age of the total portfolio by selling down older assets. AerCap confirmed it was on target to complete between $2.5bn and $3bn in sales by the end of the year.
During the quarter, AerCap executed 219 transactions across aircraft, engines and helicopters, comprised of 134 lease agreements, 33 purchases and 52 sales. Kelly said that demand remained “robust” reporting that customers were keen to “lock in lift for the years ahead. Lease extension agreements made up the majority – some 80% - of the 134 lease agreements signed during the quarter, which was even higher on the widebody side up to 90%. Kelly noted that the figures show the ongoing shortage of aircraft caused by OEM delivery delays, engine issues and MRO capacity constraints, all of which has also driven high margins on sales.
AerCap’s total sources of liquidity were approximately $20bn, with a leverage ratio at the end of the quarter of 2.51x, the same as last quarter, even after $1.6bn of cash capex and almost $1.2bn of share repurchases during the quarter.