There are some positive financial signals from leading aircraft leasing company Air Lease Corporation (ALC) in its first-quarter 2022 earnings results. Despite writing off 27 aircraft stuck in Russia. ALC is riding the pandemic recovery wave. Listed as ‘AL’ on the New York Stock Exchange, Air Lease Corporation indicates just above 25% revenue growth in the first quarter of 2022.

The aircraft lost to Russia represent a 3.4% loss of the lessor’s fleet value. However, ALC is chasing down insurance claims to recover losses relating to these aircraft totaling approximately $802.4 million. John L. Plueger, Chief Executive Officer and President, commented,

“Industry fundamentals continue to strengthen globally – demand is expanding both for new and young used aircraft, supporting continued firming of lease rates and bolstering the value of the existing aircraft in our fleet. We benefited from this improving backdrop during the first quarter. While we wrote-off our Russia exposure, we are vigorously pursuing our insurance coverage and believe we have strong and valid claims."

Air Lease Corporation Boeing 737 MAX
Photo: Boeing

Looking ahead

ALC took delivery of eight aircraft from its new order pipeline, and one aircraft from the secondary market, amounting to roughly $490 million in investments. Balancing the gains and losses, as of March 31, 2022, ALC's owned aircraft fleet is comprised of 370 aircraft, with a net book value of $22.3 billion. Of these, 268 are narrowbody aircraft and 102 are widebodies. The average aircraft age and remaining lease term stands at 4.5 years and 7.0 years, respectively.

All in all, total revenues for the first quarter increased by 25.7% to $596.7 million, compared to the three months ended March 31, 2021. The increase in total revenues was, for the most part, driven by the continued growth in ALC's fleet size, as well as adjustments to leasing arrangements to curb losses there. Steven F. Udvar-Házy, Executive Chairman of the Board, noted,

“With the strengthening market, we are monitoring continued delivery delays from Boeing and Airbus very closely, and will adjust accordingly to take advantage of market opportunities – fostering fleet growth in 2022 and beyond. ALC is well-poised to execute successfully on our strategy as the recovery continues. We are also pleased to report that we have fully completed our $150 million common stock repurchase program."

Despite difficult times, the future is looking bright. Photo: Boeing

From the investors' perspective

ALC has a rating of Buy. According to the books, ALC ended the quarter with $29.5 billion in committed minimum future rental payments consisting of $14.1 billion in contracted minimum rental payments on the aircraft in our existing fleet and $15.4 billion in minimum future rental payments related to aircraft on order.

Relating to the stock market, ALC completed $150 million in stock repurchases through which they acquired approximately 3.4 million class A common stock. Earlier this month, on the 4th, ALC’s board of directors declared a quarterly cash dividend of $0.185 per share. The dividend will be paid on July 8, 2022.

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