Aircraft lessor Aviation Capital Group (ACG) has reported record earnings for the first half of 2025, driven by strong lease income, profitable asset sales, and a significant insurance settlement tied to its exposure to Russia.
The California-based company posted total revenues of $612.5 million for the six months ending June 30, up 4% from a year earlier. Pre-tax net income came in at $613.8 million, including $506.4 million in insurance proceeds.
ACG recognised a net benefit of $506.4 million in the second quarter related to insurance claims on losses from Russia exposure, with an additional $38.4 million expected in the third quarter.
CEO Tom Baker said the company remains in "growth mode," with $9.5bn in aircraft commitments through 2031 and a net debt-to-equity ratio of 1.9x, down from 2.3x at the end of March.
Available liquidity stood at $5.8bn by the end of the first half of the year, up $1.3bn from the prior quarter, positioning the company to fund debt maturities, aircraft acquisitions, and future expansion.
Operating cash flow totalled $277.4 million for the first half of the year, while capital expenditures reached $1.6bn, reflecting new aircraft purchases.
ACG expects to take delivery of 31 more aircraft in the second half of 2025.
The lessor added 10 new-technology aircraft during the second quarter, including A320neoss, A330neo, and 737 MAX aircraft. The company also began acquiring aircraft under a portfolio deal with Avolon with additional closings expected later this year.
ACG sold eight aircraft and three airframes in the second quarter, realising a net gain of $21.7 million, citing a favourable market for used aircraft.
At the end of the first six-months of the year, the average age of ACG’s owned fleet was 5.7 years, with an average remaining lease term of 6.9 years.
On the financing side, ACG closed a $1bn secured delayed draw term loan maturing in 2027, which remained undrawn at quarter-end. It also increased its unsecured revolving credit capacity with Tokyo Century to $1.5bn and maintained unencumbered asset coverage of 1.5x versus unsecured debt.