AerCap CEO Aengus Kelly has urged that tariffs not to be placed on used aircraft as economic uncertainties and the tariff war continues.
“In my discussions with government officials, what I’ve said is, if you do put in tariffs, then yes, it is suboptimal, but make sure that tariffs are not placed on the used aircraft market so that the consumer does not get punished and the bill is minimised,” said Kelly.
The lessor chief made the comments during the company’s earnings call after reporting a successful first quarter for 2025.
“If you were to tariff, for example, used Airbus and new Airbus aircraft in the US, that means there will be a smaller supply of aircraft available to US carriers, which will mean less seats,” he continued. “If you let used aircraft in, you’re not helping or hurting Airbus in any way, shape, or form. Airbus has manufactured those aircraft – they’re gone. The same is true on the other side in this worst case scenario.
“Europe should allow European carriers to access used Boeing airplanes – they’re, again, not helping or hurting Boeing by taking used aircraft. But, if they don’t take used aircraft, they’re hurting their own consumers more. The average person is going to pay more for tickets if governments restrict the supply of aircraft to just new from one manufacturer.”
He added that it was still “very early in the game” and much outlook on tariff impact is largely speculative.
“From AerCap’s perspective, we have fixed caps of escalation in place with our current contracts with the OEMs,” Kelly said. “So, on these contracts, tariffs won’t affect us.”
He added: “Ultimately, if the Europeans retaliate and match US tariffs, and then run a more global basis, we will see used aircraft values increase.”
In addition, the tariff conflict might pressure China to lift its 20-year aircraft age limitation.
“If you were to remove that limitation in China and certain other countries in emerging markets in Asia, what you would find then is that demand for new aircraft would be dampened. A lot of aircraft would not leave the market and stay in service.” He highlighted that he hoped for a “tariff free industry”.
Kelly noted that despite the ongoing economic uncertainty, the company continues to see a high level of demand and strong bids for its assets. He added that the first quarter period saw 99% utilisation rate and 84% extension rate. These higher extensions from airlines are supporting lower transition costs for the company.
The company recorded a net income of $642.9 million in the quarter, up from $604.2 million a year prior. On the back of its positive results, the company launched a $500 million share repurchase programme. The company also declared a quarterly cash dividend of 27 cents per share with a payment date of June 5, 2025.
In addition, the company has raised its adjusted earnings per share (EPS) guidance for the full year to $9.30-10.30 per share, up from $8.50-9.50 per share. The company said its $177 million gain on sales in the first quarter, along with higher net maintenance contribution and higher other income were key drivers in the raised guidance. During the company’s earnings call, AerCap CFO Peter Juhas said the company will be in the “top half” of its newly issued guidance.
The company’s sales totalled $683 million in the period, relating to 35 assets sold.
The results and positive outlook come amid US airlines trimming capacity and pulling their full year capacity in the wake of economic uncertainty.
“It’s very important to realise that the US is 22-23% of the global market,” said Kelly in the earnings call. “It’s an important market, but not the driving force. Some US carriers are going to retire some aircraft, but what aircraft exactly are they retiring? Are they CRJs? I know one airline it is 30 E1s. I don’t care. It could be a very old 757 – they’re not relevant. These are 25 year plus aircraft. We are not seeing current or 18-19 year old aircraft being retired – quite the opposite.”
He added that the company extended 26 aircraft in the US market that were close to 18-19 years old. The extensions were around six years.
“Airlines need to know they have the capacity for the longer term,” commented Kelly. “You can’t turn on a dime when it comes to planning your aircraft fleet. Airlines are often buffeted by short term gyrations in the global economy, but longer term – they have to know what seats they need and build to that. Because of this, we’re not seeing any reduction in demand at the moment.”
AerCap’s revenues totalled $2.1bn in the first quarter, up 3% from $2bn a year prior. This includes $1.8bn in lease revenues, up 2%. Expenses totalled $1.36bn, down marginally from $1.37bn.
For the quarter, the company recorded capital expenditure totalling $1.5bn, which was used for the purchases of 13 aircraft, 35 engines, and one helicopter.
The company’s cash flow from its operating activities totalled $1.3bn, down slightly from $1.4bn a year prior. The company added that it signed financing transactions for around $1.5bn during the first quarter of the year.
As of March 31, 2025, the company held $1.3bn in cash and cash equivalents, with debt totalling $46.2bn. Adjusted net debt to equity was 2.4x.
Additionally, the company’s portfolio consisted of 3,508 aircraft, engines, and helicopters that were owned, on order, or managed. The average age of its owned fleet was 7.5 years – 4.9 years for its new technology aircraft and 15.2 years for current technology aircraft. The average remaining contracted lease term was 7.3 years.