California-based lessor Air Lease has reported a sharp rise in second-quarter earnings, supported by a $344 million insurance settlement related to aircraft detained in Russia and sustained demand for aircraft leasing.
Net income for the second quarter rose to $374 million, or $3.33 per diluted share, compared with $90 million, or $0.81 per share, during the same period of 2024. The results included the Russia-related settlement, which management expects will be followed by an additional $60 million net benefit during the third quarter of this year.
The company has now recovered or signed agreements to recover 104% of its initial write-off related to its Russia exposure.
“We had a strong quarter bolstered by our new aircraft deliveries, healthy gains on sales, increasing portfolio yield, and significant Russia insurance recoveries,” commented John Plueger, chief executive officer and president at Air Lease. “Demand for aircraft, both on the leasing and sales side, remains robust and bodes well for margin expansion.”
Revenue increased 9.7% to $731.7 million, up from $667.3 million a year earlier. Despite a lower volume of sales – four aircraft sold for $126 million, versus 11 aircraft generating $530 million in the prior-year quarter - Air Lease cited timing issues rather than softening market demand.
Aircraft sales revenue came in $2 million below estimates of $55 million, according to analysts at TD Cowen, but gains on sale were strong at 16%, well above the historical average of 10% and the first quarter’s 13%. Full-year guidance for aircraft sales remains $1.5bn, with $900 million expected during the second half, including $300 million in the third quarter. TD Cowen models $137 million in remaining 2025 sales and trading revenue.
During the quarter, Air Lease purchased 12 new aircraft from its order book, adding $890 million in flight equipment. Fleet utilisation remained at 100%, with the average fleet age averaging at 4.8 years and the average lease term totalling 7.2 years.
Year-to-date, the company has delivered approximately $1.7bn in aircraft, against a full-year delivery outlook of $3 to $3.5bn. Its forward order book is fully placed through 2026, with limited placement requirements in 2027.
During an earnings call for investors, Air Lease confirmed that it has cancelled its order for seven A350 freighters, freeing up over $1bn in future capital expenditure commitments.
Plueger emphasised that while the aircraft type is strong, delivery delays and a decision to focus on passenger aircraft prompted the move. “Contractually, the majority of our A350F aircraft were more than a year late,” he said.
On OEM delivery performance, Plueger noted that Boeing has so far met its delivery projections, while Airbus has seen no new slippage following earlier delays announced in early 2025, particularly affecting single-aisle aircraft scheduled for 2026 and 2027.
As of June 30, 2025, Air Lease had a fleet net book value of $29.1bn, up from $28.2bn at end of last year.
The company owned 495 aircraft at the end of the quarter, including 357 narrowbodies and 138 widebodies, while also managing 53 aircraft on behalf of third parties.