Air Lease Corporation (ALC) has reported a 7.1% fall in revenue during the first quarter of 2021 to $474.8 million compared to the three months ended March 31, 2020.
ALC stated that despite the continued growth of its fleet, revenues decreased “as a result of the full quarter impact of the COVID-19 pandemic, which only partially impacted the first three months of 2020 when the pandemic began”. Also, during the three months ended March 31, 2021, ALC adds that it was not able to recognize $48.7 million of rental revenue “because lease receivables exceeded the lease security package held and collection was not reasonably assured for certain of our leases”. ALC also entered into lease restructurings, which typically included lease extensions, that resulted in a decrease of $37.0 million in revenue.
ALC’s net income available to common stockholders for the three months ended March 31, 2021 was $80.2 million compared to $133.3 million in 2020. Diluted earnings per share for the full year 2021 was $0.70 compared to $1.17 for the three months ended 2020. The decrease in net income was primarily due to the decrease in revenues and an increase in depreciation and interest expense from the growth of the fleet, partially offset by a decrease in selling, general and administrative expenses.
“We continued helping our customers through a difficult winter season in Q4 and Q1 and we are hopeful that the worst of the global pandemic is behind us. The world’s airlines need much more time for financial recovery, yet fleet renewal remains a top priority and we are heavily involved in this process. For Q1, we exceeded our aircraft investment expectations, and our operating cash flow increased modestly relative to last year’s pre-pandemic first quarter. We see accelerating domestic traffic recovery in multiple geographic regions, with expectations of improvement over the remainder of 2021 in regions still heavily impacted,” said John L. Plueger, Chief Executive Officer and President.
“Lease placements from our forward orderbook are tracking well, as airlines recognize that re-fleeting with the most environmentally friendly and fuel efficient aircraft is key to their long term prosperity and future. Lease financing is increasingly critical to airline fleet restructuring, and ALC's focus on new aircraft places us at the leading-edge of industry demand. We believe the recovery in the US and China are harbingers of what will occur globally as travel restrictions are relaxed and vaccines are more widely distributed,” said Steven F. Udvar-Házy, Executive Chairman of the Board.
During the quarter, ALC took delivery of 10 aircraft from its orderbook, representing approximately $602 million in aircraft investments.
As of March 31, 2021, ALC owned 342 aircraft in its operating lease portfolio with a net book value of $20.8 billion, a weighted average age of 4.3 years and a weighted average lease term remaining of 6.9 years.
The lessor also placed 95% of its contracted orderbook positions on long-term leases for aircraft delivering through the end of 2022 and 80% through the end of 2023. •
ALC ended the quarter with $26.8 billion in committed minimum future rental payments consisting of $13.4 billion in contracted minimum rental payments on the aircraft in its existing fleet and $13.4 billion in minimum future rental payments related to aircraft on order.
ALC has confirmed that to date, 46% of the lease deferrals granted have been repaid, representing $111.6 million. This contributed to the increase in ALC’s operating cash flow for the quarter, despite lower rental revenues as compared to prior year’s pre-pandemic first quarter.
During the period, ALC issued 300,000 shares of 4.65% Fixed-Rate Reset Non-Cumulative Perpetual Series B Preferred Stock, $0.01 par value resulting in approximately $300.0 million in proceeds.
In April 2021, ALC completed an amendment to its syndicated unsecured revolving credit facility, increasing the capacity to $6.4 billion and extending the final maturity to May 2025.
ALC has declared a quarterly cash dividend of $0.16 per share on its outstanding Class A common stock for the first quarter of 2021. In addition, the ALC board of directors has granted a six-month extension to its share repurchase program, which authorized a repurchase of up to $100.0 million of ALC Class A common stock through December 31, 2021.