Air Lease (AL) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues totaled $667.3 million, with $610 million from rentals and $57–58 million from aircraft sales and other activities; 13 aircraft delivered and 11 sold for $530 million in proceeds.

• Net income attributable to common stockholders was $90.4 million ($0.81 per diluted share), down 25.9% year-over-year, impacted by OEM delivery delays and higher interest expense.

• Fleet utilization remained at 100%, with a young average fleet age of 4.7 years and average lease term of 6.9 years; customer base spans 118 airlines in 59 countries.

• Orderbook is 100% placed through 2025 and 96% through 2026, providing strong visibility and stability.

• Ended Q2 with 474 owned and 67 managed aircraft, $31 billion in total assets, and $30 billion in committed minimum future rental payments.

Financial highlights

• Q2 2024 total revenues: $667.3 million, down 0.8–1% year-over-year; rental revenues decreased 0.4% to $610 million.

• Net income attributable to common stockholders was $90.4 million, down from $122 million in Q2 2023.

• Adjusted net income before income taxes was $137.4 million, down 21.9% year-over-year.

• Interest expense rose to $203.3 million, driven by higher composite cost of funds (3.99%) and increased debt.

• Liquidity stood at $8.2 billion, including $0.5 billion in cash and $7.7 billion in undrawn revolver capacity.

Outlook and guidance

• Expects $4.5–$5.5 billion in aircraft investments and $1.5 billion in aircraft sales for 2024.

• 100% of committed orderbook through 2025 and 96% through 2026 placed on long-term leases.

• Delivery delays for Airbus and Boeing expected to persist for 3–4 years due to supply chain and labor issues.

• Funding costs may benefit from potential Fed rate cuts, with profit margins expected to remain flat in 2024 and improve in 2025.

• Management remains optimistic about long-term aircraft demand and fleet value.