Lessor AerCap 2019 Net Profits Rise; MAX Impact Still Uncertain

Aercap Boeing 737 MAX 8
Credit: Boeing

Ireland-based lessor AerCap, reporting $1.15 billion in net income for 2019, said its prospects are fair for 2020, although the continuing Boeing 737 MAX grounding is having an adverse effect on its figures.

AerCap’s 2019 net result was up $150 million over 2018. The company said the increase was primarily driven by higher lease rents resulting from an increase in average lease assets from the delivery of new technology aircraft in 2018 and 2019. 

Diluted earnings per share increased by 23%, partly driven by the repurchase of 25.9 million shares during 2018 and 2019.

The company said that approximately 97% of lease rents through 2022 had already been contracted and that its average current lease expires in the third quarter of 2027. AerCap’s owned fleet has an average age of 6.1 years and the company enjoyed a 99.6% fleet utilization rate in 2019. 

Following its share repurchase scheme over the past two years, a further $250 million share repurchase program has been authorized, which will run through June 30, 2020.

Expressing his satisfaction with the past year’s results, CEO Aengus Kelly noted that: “New technology aircraft now represent 58% of our aircraft fleet, the highest percentage of any major lessor, positioning AerCap well for success in the years ahead.”

Prior to the grounding of the 737 MAX, AerCap had delivered five of the aircraft to an airline customer; the Dublin-based company has a further 95 of the type on order. 

Boeing currently estimates that the Boeing 737 MAX will begin to return to service in mid-2020,” the lessor said in a statement. “However, it is uncertain when and under what conditions our Boeing 737 MAX aircraft will return to service and when Boeing will resume making deliveries of our Boeing 737 MAX aircraft on order. As a result, we have incurred delays and expect to incur future delays on our Boeing 737 MAX deliveries, and any such future delays are likely to have an impact on our financial results.” 

AerCap added that in the past month it had exercised an option to purchase an additional 50 Airbus A320neo-family aircraft, with deliveries starting in 2024. 

Alan Dron

Based in London, Alan is Europe & Middle East correspondent at Air Transport World.