Air Lease (AL) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues were $667.3 million, with net income attributable to common stockholders of $90.4 million ($0.81 per diluted share), down 25.9% year-over-year due to OEM delivery delays, lower end-of-lease revenues, and reduced aircraft sales gains.

• 13 new aircraft purchased and 11 sold in Q2, ending with 474 owned and 67 managed aircraft; fleet net book value rose to $26.8 billion.

• Maintained 100% fleet utilization and a young average fleet age of 4.7 years, with a diversified customer base of 118 airlines in 59 countries.

• 100% of forward order book placed through 2025, 96% through 2026, and $19.9 billion in aggregate commitments through 2029.

• Total assets reached $31 billion, with $30 billion in committed minimum future rental payments and $8.2 billion in liquidity.

Financial highlights

• Q2 2024 total revenues declined 0.8% year-over-year to $667.3 million, with rental revenues at $610 million and $57–$58 million from aircraft sales and other activities.

• Net income and adjusted net income before income taxes fell year-over-year, with adjusted pre-tax margin at 20.6% and pre-tax ROE at 10.8%.

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

• Depreciation expense increased to $282 million, reflecting fleet growth.

• Cash flows from operating activities for the first half of 2024 were $785.1 million, down 10.9% year-over-year.

Outlook and guidance

• Expects $4.5–$5.5 billion in aircraft investments and $1.5 billion in aircraft sales for 2024, with Q3 deliveries projected at $2 billion, subject to OEM performance and labor risks.

• 100% of 2024–2025 and 96% of 2026 orderbook placed on long-term leases; 64% through 2029 placed.

• Delivery delays from Airbus and Boeing expected to persist for 3–4 years, impacting investment pace.

• Lease rates on new agreements and extensions are rising but lag interest rate increases; further increases expected.

• Funding costs may benefit from anticipated Fed rate cuts, supporting lease rates and aircraft values.