Salem Radio Network News Monday, October 3, 2022

Business

AerCap revenue jumps as global travel recovery strengthens

By Padraic Halpin

DUBLIN (Reuters) -A strengthening rebound in air travel “across all major regions” boosted second-quarter revenue at AerCap as the world’s top aircraft lessor predicted that supply chain issues for planemakers would support leasing demand for years to come.

Dublin-based AerCap said lease rents were negatively impacted by the loss of revenue from Russian aircraft in the quarter but that recovery in passenger demand led to higher overall levels of cash collection and greater utilisation of its fleet.

It reported a 36% increase in revenue to $1.67 billion, just above the $1.65 billion forecast by seven analysts polled by Refinitiv.

“The strength in passenger demand, coupled with supply constraints across the industry, is resulting in a favourable leasing environment,” CEO Aengus Kelly said in a statement.

In a presentation for investors, AerCap said it believed the supply chain issues – from a lack of spare engine capacity to lengthening maintenance, repair and overhaul backlogs – would continue to constrain production over the next few years.

Lessors, who now control more than half the world’s fleet of aircraft, were hit earlier this year by the confiscation of hundreds of planes in Russia after Western sanctions forced them to cancel their contracts with Russian airlines.

AerCap booked a pretax charge of $2.7 billion in the previous quarter as it recognised a loss on its more than 100 jets that remain stranded in Russia, the largest exposure of any lessor, accounting for 5% of its fleet by value.

It submitted a $3.5 billion insurance claim in March and gave no update on that process on Thursday, or on the 113 aircraft and 11 engines that remained stranded in Russia as of May.

(Reporting by Padraic Halpin; editing by David Evans and Jason Neely)

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