Earnings call transcript Q4 2022

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Operator

Good day and welcome to AerCap's Fourth Quarter 2022 Financial Results. Today’s conference is being recorded and a transcript will be available following the call on the company’s website.

At this time, I would like to turn the conference over to Joseph McGinley, Head of Investor Relations. Please go ahead, sir.

Joseph McGinley

Thank you, operator and hello, everyone. quarter call. fourth our to XXXX conference Welcome With Kelly; Pete and is our Juhas. Officer, Aengus Chief Executive our me today Chief Financial Officer,

you not historical Before like may be during call, today's facts conference that statements. remind this are we made some which I call forward-looking statements begin to would

law that that risks undertakes information publicly implied results in reflect to statements. cause AerCap or imposed those events any statements involve to arise may from or Forward-looking to obligation or after expressed than other no by and uncertainties revise statements or actual differ materially that update call. circumstances such this forward-looking events, future

our could simultaneously for available is in information release is XXXX. open at dated our issues that can of conference being and webcast performance XX, website and call replay. be AerCap's release presentation call aercap.com materially earnings Further on aercap.com. and are earnings to found be This archived March public will concerning copy at the affect A

shortly We at run-through allow for time and the end we'll Q&A. will earnings presentation our

one I reminder, to limit themselves up. and one that follow analysts a would ask As question

I turn Kelly. will Aengus the call over now to

Aengus Kelly

joining full earnings a our billion I quarter which XXXX. quarter. year the adjusted previous basis, On million and year pleased $X.XX share $X $X.XX fourth full earnings of for you of to in adjusted we and $X.X per in call. of per generated another us November for of to $X.XX income income estimate the of amounted to XXXX report updated AerCap. earnings share of $XXX Thank net surpassing am strong We for net our adjusted adjusted earnings

an are to the of success in business transactions. companies all how the integration lines across of the well two of transaction execute our performance demonstrates working teams number reflects GECAS aviation. the the clearly level This strong acquisition, and of activity our together extraordinary recovery This

the X.X at year, flow despite billion us high, debt of Russia, XXXX. generation which helped XX, of a the exceeding achieve times remains operating of December $X ratio also impact for cash Cash equity to

strong share the repurchase am I flows, to $XXX today. million new Given cash announce earnings a and program pleased

of further and the industry, of the theme year. XXXX of the by quarters, course activity for over on-going to be China. will the prior is aircraft the unparalleled strengthen, the supported AerCap’s continues transactions reopening leasing completing Continuing level environment of in XXX in

lease this activity In the alone, fourth AerCap flawless agreements, possible, purchases, simply XXX transaction take team quarter XX Without the of it integration and markets. level not a XXX of the transactions would have recovery advantage would companies, full completed aviation two the the possible record the been sales. in across XX of to be nor

power we million the aircraft gains margin platform a One $XXX area aircraft XX% across of where or was generated side, pronounced on was the sales and where the particularly engines in helicopters.

We with evidence continue as driver. exceed to the XX% being the XXXX travel China now of Asia latest the Europe, and levels, of see all recovery further Americas

XX,XXX surpassing policy growth significant, flights approximately the to end optimistic about the weeks customers low of also per is China future. flights has since are two of In last our domestic in particular, the they Having the at that in China, from recently, all lifted in spent airlines, November. a seeing zero activity clear of it these day speaking the the leaders COVID was to day compared flight per been XXXX

no restrictions are this numbers. are when What China. to consumer be we lifted, and will and As well we seeing in different large they world allowed have travel, prioritize said is and that do travel continue the around time so consumers the in to again, is after

and exacerbate new the aircraft the growth place side on premium engines all the We pushing available retirement positioned body this believe for As rates a severely aircraft body traffic I acute this today lease are address up on ramp COVID demand to as airlines result, further planning aircraft of wide and opportunity. higher. particularly a puts the during combination will is will capacity. wide that production, imbalance believe Chinese be that and conversion continued restricted well aircraft the took of and many are this cargo AerCap supply to

impact. before and where side, spoken to supply the COVID We chain narrowbody a have on issues groundings, had cuts about significant due the production have shortages

approximately As XX,XXX operation aircraft to this today, you approximately there are narrowbody This time. means that will of is at in the compared XXXX. built XXXX fewer so the the or run rate slide, see narrowbody in XX% to equivalent from production aircraft

are XXXX, and On and years have for less new that even been delivered time. the XXXX XX% technology two the so XXXs per were five full than the Production XX% fewer more AXXX coming the or of month in body reduction XXXX with approximately also were rates expectations. targeting a body relative That's AXXXneos aircraft storage. XXXX. and well XXX less as wide these three service in production XXXX, Boeing such targeting below delivered in Airbus a capitalizing X so XXXX. per this NEO delivered than from were the in wide per five than targeting This per has wide only XXX normal more acute. month body side, equivalent are XXXX of month month aircraft XXXX in and how opportunity? month built in month we aircraft was XX these to on to XXX, resulted almost in AXXXs XX reductions per in since They at the

XXXX, rest you which can industry completed transactions, since more AerCap has wide is XXX give than body The I nearly the suspect combined. best possibly of start that leasing is aircraft example I the of the

affecting persist and years, upward that we on in production broad be and and several We the are aircraft issues and for strong to values by likely aircraft. expect traffic lease demand sustained the growth to rates pressure We low seeing body resulting this future. continued base rates demand, are for production wide believe foreseeable for

in lease interest and call, more aircraft and if inflation new the way with from is outlined rates to AerCap is on volatility. further an interest are our One from protection it our rate face we the prior escalation, impact the On were to provides like the adjusted I'd aircraft rates which generally. interest finance it leases would topic for This aircraft desks. to rates and same of directly exposure manufacturers and business changes address airline purchase

that So accepted this it's should reflected widely in lease rates. be

put into to increases kinds However, of it's context. important these

an up average. can base of approximately on As on slide, airline's this see cost costs you leasing make X%

they customers are are through of But costs illustrate to airline fuel looks more course, pass to less much level here large or changes palatable whatever airline realize. even So that labor may percentage should leasing of our in material investors cost every than minimize this costs interest, than increases and may can. to many expenses, be,

In beyond. we an The The an was this environment are summary, years. navigated this and with and and well improve, market continues another company three earnings flow great extraordinary over our and the aircraft for business. record has is for now to on cash throughout XXXX results. financial And the upward trajectory successfully period positioned in quarter reflected

evidenced the future today's confidence our is of Our repurchase share new announcement program. by in

With a for outlook our financial for over performance XXXX. detailed review that, and of I will Pete hand the to call

Peter Juhas

We very performance quarter. the Thanks, Gus. Good strong a morning, for everyone. fourth had

reduced net our basic of adjusted that per million, Our and The purchase our reduced $XX premium accounting This $XXX which in million million was revenue, income of adjustments amortization, maintenance lease maintenance higher was $XX quarter. leasing $X.XX or million, the of reflected expenses. that amortization in impact amortization share. million was lease $XXX $XXX and rents included rights

had related our in we of our recoveries Russian leases, expenses credit of $X received Ukraine of and transaction related million conflict the integration claims related proceeds line fourth to the net to quarter. reflected which million In And in quarter, item. the and letter $XX was we

Taking million quarter. our million, rents I'll Basic the million account $X.XX increase the for quarter, GAAP briefly $X,XXX the per affected $XX from lease last of all or drivers income talk for those that quarter around share. results into for quarter. $XXX main our about an the fourth is fourth for net

lease our of spreads. were the amortized reflected term the of basically reduced basic Lease and I remaining amortization. lease premium lease over rent assets As $XX million mentioned, premium

for assets that amortization. quarter rights in the were maintenance amortized were revenue fourth $XXX reflects $XXX revenues without $XXX maintenance during maintenance this Maintenance million million the would been $XXX revenue million and other million to that words, higher or have In quarter.

$XXX gain on was quarter. sale of million for assets Net the

million. sales, the assets a owned sold quarter, volume quarter completed was record $XXX including The in around fourth the sales XX During we XX of total our fourth of assets. asset of

gain-on-sale So margin that for XX% the represents very of strong quarter. a

Those well million one claims quarter, $XX to from items related related insurance as was million to of other income proceeds for airlines, Garuda income Our other total our in quarter. proceeds were two included as the which helicopters. of unsecured the $XX of

the mentioned letters I that from Ukraine of represents received related credit quarter, in the earlier, recoveries As were $XX which proceeds conflict to quarter. net the fourth we million during

for of by proceeds amounts amounts. We quarter of received virtually leases previously, of of first during disputed now received As banks. mentioned we've XXXX. the most certain related our all we that shortly submitted were but those there letters thereafter, claims We've credit the Russian to were those

under amortization the is from expenses. Safran, investment. $XX Equity million method and equity which was reflects $XXX for earnings were quarter. $XX engine venture our equity including investments Shannon Support, and joint expenses net the Leasing for Engine largest That of of strong continued the primarily our is million earnings with quarter, million

this engine been his Gus remarks. driven factors year, in performance generating has and on-going by that mentioned demand SES strong the supply

after our to of our was net full approximately was charges Ukraine adjusted $XX For of related million and the year $X.X transaction purchase million, billion. $XXX and EPS the million, income and accounting related XXXX, net integration year $X.XX. adjustments conflict $X,XXX adjusted expenses That's full of the for

our Our we guidance on of a strong quarter to to $X.XX full outperformance revised EPS reflects our as relative original the $X both of guidance $X.XX well by third that [ph] $X provided as revenue of at higher revenue. from higher factors. impact maintenance cash has call positive on seen been That well We've outperformance earnings as to driven collections, number $X.XX. a as a year

sold and for just we've had higher of venture expectations. gain that year. income We've our from under of and XX% businesses. worth sale $X.X on ahead leasing, million And for XXXX on a of leasing well We performed gain sale our engine from assets full seen has which margin billion SES, in $XXX also helicopter the performances joint strong

received We $XXX also and in significant unsecured claims other around year, million total. items during the proceeds from

XXXX. gains We also in had $XX on million caps rate of our and interest mark-to-market swaps

liquidity We position. continue to strong maintain

of target billion, December of and $XX our were months X.X billion. resulted of excess in around X.X coverage our coverage which represents coverage, uses of approximately which next times ratio XX, cash As in of XX is total $X times, liquidity sources sources above

operating Our were the along total leases the strong billion by cash a collections credit aircraft strong performance, sold continued flow leases. which operating run some the of that quarter, that quarter. $X.X related That's as to approximately proceeds cash as proceeds sales well and was letter our to from in with was driven finance number, very Russian

As below leverage a our in generation, we our and strong which X.X flow year ratio times, decrease the saw the cash times. earnings half and of is of we equity a net well of ended ratio. debt result two to And target with a significant

cost third total quarter, secured outlook was week, ratings Moody's which our Earlier was ratio end to year, debt approximately this we and of Fitch. to XX% is the and positive with remain fourth average the Our on at the line in BaaX, for upgraded the unsecured our senior quarter X.X%. debt with of assets

trajectory. So that ratings continues positive our

minutes outlook a spend financial few about for our I'll Now talking XXXX.

both mentioned, to Gus a expect seeing in supply demand aircraft we strong significant persist. recovery of constraints, which As we're and

see to So continues of continue to positive. higher course the climb to be we the during environment expect for XXXX. And leasing rates lease

like any Our EPS, $X.XX of EPS year XXXX claims. gains as to other sale, adjusted full for unsecured of recoveries well items on is guidance $X excluding as

the we EPS of XXXX you that can was of haven't see our forecast. in a that at XXXX of included look we comprised number $X.XX, items When

swaps gains For an we rates on we as those value sale, were which increased. interest had derivatives also assumed the taxes example, gains any XXXX. of and In and and mark-to-market after in caps rose interest have XXXX, $X.XX rate

$X.XX a that's So impact.

the from at the airline February rent receiving invasion no of last we the until of were customers. year, Up that's still our Obviously longer Russian Ukraine case. end

removal the well year. those we quarter the reflects of as the related full So in sprint off as to wrote which $X.XX assets the the in of depreciation first last

items the ramps higher in associated cargo and cost, XXXX unsecured forecasted that with program items XXXX, well as for as anything in in in We both also shown reflected We'll costs also had impact some are XXXX. $X.XX of up this as and those so $X.XX higher we other conversion claims year, our those haven't here. insurance have

we $X XX, which expect we income revenue in sale increase $X to EPS our items gain other project and finally, And items. on other will or to lease in excluding higher XXXX, XXXX any

If a of total $X.X of can at income around billion around that total look and statement have us $X.X approximately of and revenue we income depreciation see gives expense SG&A take billion. That for projected to billion $X.X approximately $X.X expenses other expect of you billion. leasing XXXX, interest our we $X.X expenses, billion pretax

income income SES. tax line, next The includes expense our and from equity method investments from

we and from that expect have We around rate $XXX our effective for of equity income to around XXXX be expect tax our investments. million will XX%

income So billion. GAAP that net approximately us $X.X of gives

accounting amortization $XXX and lease right of is We to to million year. have expect amortization premium purchase $XXX for from the impacts maintenance around that

in results and billion which gains sale. to of include that as doesn't income on around EPS net So of any $X.XX, said, adjusted adjusted $X.X I've $X

expect the which the to for over year, of $X.X And billion We we had sales in of the sales of that for XXXX. billion increase billion $X.X an expect CapEx $X.X asset have we cash have year. to is

now, best depend But volume depend for the our of on sales OEMs course, would the estimates. are And the of aircrafts. Of the CapEx aircraft deliver of ability amount during the the year. on will for to those market

our financial strong above another the that's guidance, the February, delevered assets, After Russian we've was of and rebounded of AerCap. level can level overall, activity, you of our and strongly invasion for our our this fact below which the performance last to the a quarter Ukraine So in write-off well well that see transactions target. we've

results that for that to should this and which for repurchase are also the outlook Moody's and new our That BaaX be our positive XXXX ratings confirmed we a confidence gives for see to us XXXX. received by we driving this And We about upgrade earlier week. to confidence these trends share the expect in business program, continue, beyond. announce

for up call Q&A. operator, with can And we open that the

Operator

[Operator Thank Please Instructions] you. take from The question-and-answer will session Baker ahead. first electronically. will be JPMorgan. We Jamie from go conducted question our

Unidentified Analyst

operator. Hello, this is Jamie. James for [ph] Thanks, on

at given you to airline could can There a discussion article you recent the that in clarity that, a discounted is extent even sanctions guys with to price in place? was that comment on that question. were provide also First any possible Russian speculating the purchase planes just you there but

Aengus Kelly

Thanks, James.

pursuing you we and Russian against our As insurers and know, airlines insurers reinsurers. are the insurance against own claims

some our been of aircraft have potential insurance in their and lost settlements approached about We Airlines by involving some insurers Russia. Russian

whether on it However, have out anything of is stage. nothing to know early it too say will further to at and this come we it

Unidentified Analyst

would I just try understand, the thought it there. Got question

like XXXX. year, the revenues seems it Second just of impact the the $X.XX the question business cargo on cadence to for

we that year as should about how goes on? the think Just

Aengus Kelly

James, of an couple a impact that's things. well, really Sure, that's

as I'd happen then You've pretty well, in those year. say conversions do higher pretty going as have expenses, year. balanced be got throughout there well. to expenses the we insurance throughout And they're as the cargo

it's those So that both contributing of to are factors that.

Unidentified Analyst

it. Got

That's I me. question. it for appreciate Okay. the

Aengus Kelly

Sure.

Operator

Thank you.

Becker our from Helane Please ahead. take next go will We for TD question Cohen.

Helane Becker

Thanks team. the for Helane Hi, Thanks much operator. It's very Becker. time.

year think So, and Do they XXXX? the Or you not sales for for should forecast then Pete, forecast as zero how always come? sales is it? about them the take in we

Peter Juhas

of projecting sales we're expecting, $X.X the we're year. so for Helane, billion Well,

our previously. is in done what we've with which forecast, we is that consistent So it done, haven't how

sold are year. $X.X and that's market that But the made would billion will We assets a what of we the really sale haven't more to billion what expect we to because going during year expecting year. sell be of what those on like to last gains on we and XXXX. the during worth do course in $X.X sell forecasts is depend the for any We would little than the course

Helane Becker

Okay, not sale. I gains, that's Yes, helpful. meant

other about follow is then CapEx, Sorry that. $X.X And the my on billion. question up

things; you and get about it all may looks in to two, the financing it thinking two one, his delivery not are said about we're to about what what delivery and the that like slide right, looking So delays, get. at delays you earlier referred Aengus given you're and the seeing aircraft that remarks, to you how contracted

Thanks. how should what will be like So financed? actually and we CapEx think about it will how look

Peter Juhas

the you even These feast made has best announcements rice estimates that to of in your as Well, over yesterday, delays the CapEx few the But delay the about XLR Airbus last been our have continue. moving years. a I moment. are some at again. And course seen expect

a this as but situation, dynamic now. best So estimate is of it's our

Helane Becker

financing and them? thanks Okay,

Peter Juhas

This billion the then expect in will there'll cash generate in operating as of $X billion said, we coming we year, of addition, and flow $X.X be sales.

flow the numbers, the of all So were did. sheet, to to are CapEx deliver size even manageable they the relative which and generating if of the these balance very business power cash I

Helane Becker

it. Got right. Right,

much. Okay. Have day. Thanks very a great

Peter Juhas

you. Thank

Operator

We from Please Suisse. ahead. Credit will question, take Moshe next from Orenbuch our go

Moshe Orenbuch

that's Pete the Gus in obviously, actually, the Can numbers air, going quarter them XXXX likely your bit in that I'm in aircraft the of you talk or and value how, hoping of assumed little see in kind sales any be whether you've fourth guide? and rates? we'll to in lease about them the talk about in sell you Great. XXXX. manifested how And in could market a strong see benefit of

Aengus Kelly

Moshe. Sure,

So that the overall, year. We've more going we're past for than up. seeing lease seen rates

And in So that of has leasing factored that well been has obviously, in we've some that advance. accelerating. we're

months’ least Right. today, for now. that's likely time at XX signing from we're So if be to

future But in that you don't see lag effect. it does a terms of obviously, you affect don't years. So there's

of in that see as rents, throughout it think a year. should starting I lease reflected good I of And terms That's basic quarter the the point, growing the I mean, run we've you in. rate what is those expect. you're fourth that way. quarter if each would thinking somewhat I somewhat fleet would grows pretty So

Moshe Orenbuch

on in of had there's think there. you this we've confusion the the of the XX, and exclude I guess are in on investors I necessarily of kind conservative And, won't XXXX, fact other to this slide in discussion that I and rate thanks. there, guidance page excluding items that mark-to-market mean necessarily zero some Great, already, expect with of as your Is be think about those that And be you some being that zero that in some are been caps doesn't some interest swaps, the that in are as of items morning past XXXX. don't, on -- correct? the kind they -- they talking that that,

Aengus Kelly

maybe moment take I'll about And Moshe just Correct. a talk to those.

the caps swaps. rate mark-to-market interest So of and

that, from During interest we value had a derivatives benefit to rose, XXXX because that those and caps rose, mark market. of to rates the had of swaps and we those so

not that's about right, again, assumption not making so. in to projecting, going XXXX, we're happen an that in we're So that

item. that's, that's So that

the other the like ones of Some conflict. of a the lower income Ukraine as result

that So aircraft Russian gone, got our on that first the the on quarter that's that, the less depreciation obviously reflects rent we during right.

for not would that. I anything include So

conversion And program. the then we've reflected cargo

the items, sale. In other terms games the so of on

or make X% whether year, of So a high we've sale obviously, XX%. I what think half the, think or Last our had you historically, that's gain was that's could and mean, look dependent, we've of And accurate. market then sales but and a take of projection of you it I billion evaluation XX%. had. two low to margins on a at that's

those million came of of in we something other had And that And claims project. not items, XXXX, terms in are XXX through. we unsecured that then about

the to of that So in, sheet numbers say unusual XXX. come and of item. income in that's the not of not in size to other us in these in business size, But I'd line have it's a X for things balance a the

how would So about I that's it is. think

forecastable. what's You've top really other then are that. of is, could on is got X that XXX things come to But there

Moshe Orenbuch

much. Thanks so

Aengus Kelly

Sure.

Operator

question next Bank. your Cacanando Hillary Please take from from Deutsche will go We ahead.

Hillary Cacanando

I you a time. I'm was you've the bought for you year buy back any just And year-to-date? do of wondering stock announced could repurchase any? I you have full target. know Thank wondering, you. but if Thank it, And you

Aengus Kelly

any bought not have announced back, today. just it we We

bought haven't shares we any So yet.

we've obviously, course done going of terms look done this many In generate capital, I we're generate deploy in repurchases speculate as is the But to excess we've deploy year. want do don't at a it, to at excess we of the of way look, year. always to And that's of obviously, look how how for we natural as about effectively. And share year, full look, the what a historically, we will past. to lot capital capital us we during that.

Hillary Cacanando

your just conversion then Got program, program? timing Thank from it. that the coming regarding what revenue from of you. And cargo that on is

Aengus Kelly

Well, see on you'll to the cargo XXX or anyway. program the first start done conversions

During that cargo this of really, the then program. But in, a years from year, revenues result we'll multi-year few up start to go it's see some and next of course our it's that. a of delivering. percentage the as and, will those over And come

Hillary Cacanando

so Okay, Great. Thank the it. much for color. got you

Aengus Kelly

Sure.

Operator

Vincent ahead. We go our question next Please Stephens. will Caintic take from from

Vincent Caintic

you taking Thank my for questions.

and if the about with an the billion we of fourth the the lease funding question, of X.X of the And maybe of about how that side, offset to much you. particularly would costs. this results. building think kind spreads. funding Thank First back you year. off Appreciate quarter And net should talk rate about purchases going comments be, expansion how could

Peter Juhas

Sure, Vincent.

X.X% for year, be going terms it's quarter of was fourth the net so. in where for pretty the it So from flat to or spread think I

I So that's a estimate. think reasonable

billion billion about secure sales under that funding deals in as to to that ultimately during based X depends of would of of would we be level end In unsecured on $X worth getting will well expect on billion, we and course billion as well. all on that do terms deliveries of sales, based the the year, just and expect of aircraft the in on these billion obviously will to funding X is CapEx, $X as X deals, XX about unsecured that two the billion it to do But we that, doing. we the of so that be bonds, some half have which up we a bank that

trips be the of the it'll year. a but means during So market probably to course the three combination, to that two

Vincent Caintic

Okay, great. And helpful. That's very question. second

So moving strength Thank selling aircraft rates, the versus rates glad as to the hear such and expanding the advantage higher in aircraft evaluations lease demand How expanding? of you as between and there? well on gain taking lease valuations do you. balance sensors, since aircraft high of realizing keeping the aircraft the

Aengus Kelly

Right, selling Vincent the that. to driving about sale objective residual get the the Gain quality the it's assets, when think first we we and come price and portfolio. assets to the for is second of that improve

compose the better as in portfolio and average of that we'll sale, assets. say, aircraft do we the it feel of reasons of would we the assets, portfolio various this for portfolio is slightly a for the sale, the we what particular a before asset post Okay, a sale So this of sale than assets portfolio be where was

decision coupon XX% you're environment. of trying in driver coupons term -- very that And say a assets the the year issue XX% with rate clipping for and of years. a when built bond many the the And to sure an there's that's driver portfolio make in know key the making. of near Holding low world if you success clipping all underpinned the to a for the you're That's on primary that is that's long-term. always the many, company our

the information $X.XX rest do of we market. to issue make the do the be it's And trading the trying decision try and somewhere it's the of and of course, on is see employing things an dollar data anyone for the bond portfolio. to long-term to world. do the We else there's that shape all the the else ahead you recognizing than there. of of in We best before more an see know anyone at over that market, And have advantage I'm

XXXs would And any, that of didn't of end while to that technology could with We airlines new be we not that example going last but knew only all realized others were to they the the AXXXs, there before years. XXXs, trend we introduction for An see aircraft were. could. than over newer we the be lessor many competitors buy XX teething move technology, of major AXXXs, the faster was like are line be the into when of issues to buying the

example many one of that's So Vincent.

Vincent Caintic

Okay, helpful. Thanks that's very much. very

Operator

will from Please We take ahead. [Indiscernible] our question go Susquehanna. next from

Unidentified Analyst

you my question. for Thank taking

within those if at a pace that on last data spent you're if in talking regions Aengus, to, the So, leisure also markets, your Americas you you there. up I think recovery guess describe, good lot of reopening of you're in looking the deal would of Thanks. and business the as and then might you And you're time remarks there? China, But spent curious that about you have privy well? travel the shaping spent, within what I how prepared how other that, you you to seeing a you're time segments you the and of call. could be speak and mentioned

Aengus Kelly

say, you domestic start, market Americans, if with been Well, strong very is market has strong. I, there. The the if the extremely

with summer We there very good expect a yields. strong

supply You can see biggest the is tightness narrow there The long Atlantic the world. the the North U.S. that was far a market of body by markets. market Atlantic haul is And of in in booming. North aircraft

American the both the European affects that sides So there. and

also been I extremely show strong. would the market I European has Western I has market American would domestic strong. been extremely the would So show

Ryanair generating revenue, take with you'll XXXX and world XX% being the we a the had or see sales see of biggest I trend XXXX ever think above of is similar around after being type of biggest trend their Ryanair And where what week airline Europe. that repeated. in capacity give they're

major New at extent is China. the the spent but the extremely for that airlines, low need throughout carriers, spending January, occurred in on to we and it, course three the just input much first on majors, I Southeast back, good news in market the recovery seeing some Chinese pattern higher the weeks cost in of for carriers, pretty the China. fuel there. met board through Now got were was there. domestic labor but the the two time, that into focused they weekend regard we're same across be strong call And airlines of for again, of market domestic the there, Festival, costs the flight rise I higher back China, weeks Asia. costs Spring or it's That the airlines as heavily that the I the With myself Year. two from I'm all and profitability it

saw So that expect the into then next the same market. expanded XX months that international XX -- same in we Americas to think over that see And the time Europe. China. the to and in we'll in I And that is over we'd the

Unidentified Analyst

Okay, second question. my

to supply a lot come here the return international consistently moving if will, So the as as there's, it. seeing what perhaps seeing these speak And you and flights, online. back of could to lower whole. there's a volumes But a of not with belly market constructive data, lease demand pressure upward clearly speak you haul backdrop, the the we're you capacity on long side rates we're where as here to cargo

there seeing on that worse? if you're are what And you. or sort types of that are cargo on Thank curious if side. within better the any the So performing aircraft

Aengus Kelly

of the They yields products, situation sneakers, of them close of the got Targa It it pair from for where transporting value the was getting during high to to down. COVID. like to or Europe, States some should And the no be the cost a are sneakers. Vietnam stratospherically surprise cost low were that

situation. unsustainable an was that So

forward, said, in down. COVID, do we buying cargo the being pulled there's of course were at past. That there believe surprise people has demand come it it's lot lot however, of stable So was that no what market is home stuff than in that now been online. a when A the more

few food, have If major a years, was dominated Asian fish, FedEx, business moving DHL, XX it that you focused XX, UPS, the cargo bits carriers wind drill like large by the on big freighter flowers, back the around And was world. and the fleet. airlines

stable more we thus demand is and and wider e-commerce and the course, for much of broader a Now, demand supplanted cargo. have

So relative COVID. COVID. demand to it I before in very was relative it where is good still pretty It's would where say was to good that

should Of that course, be and surprise. it's no down

you side. just XXX, have body out the platform. it's As That they an just aging the of specific of aircraft [ph] XXX, feedstock. XXX are freighter types, the is narrow workhorse The two running is

So we're and of AXXX being going the combination time to a over retired see will that be by freighter. that converted replaced

very aircraft it. so as strong the we had weight which that volume because But got the need of product. would of for importantly, say on is slots, demand very is we've e-commerce XX the you a volume, is We volume, ERS that for what leased not space the uptake, strong aircraft has much already which where the the as important them, XXX-XXX very, XX seen I

fully don't moved look, in expected. So, doesn't freight any I be that all us being tonnage down, and and anyone think down, should of surprise rates we came the something came that amount at surprise

Unidentified Analyst

you. thank Okay,

Operator

Ron from ahead. Please Epstein question We our will go from next Bank of take America.

Ron Epstein

Good guys. Good, morning,

more Just to -- at a are the the depreciation you assets leasing or at just all caused too given equipment, cars, become other doing it's aircraft rates your changing or retain tightness lived guys Gus. them We one, market that? as contemplating scarce, no consider aircraft, you on businesses, of assets to have other are more when quick they value, look long

Aengus Kelly

changing as never a us we it. honest, period There's Ron the just marking accounting Yes, an depreciation that's I values. said policy the don't be been market XX-year and to to and or concept a it's well, and it of see over but served

Peter Juhas

Ron, Because assets are But higher of our on with should as they we you should inflation impact a positive residual fleet. the Certainly see say, values have it’s say. that hard Peter would here. I

we'll I that today So believers have more see longer-term strong should gives values to book but is obviously think even obviously our confidence as in give time people think how persistent this I we're but progresses.

Ron Epstein

of in inflationary Got it your are that reserves adjustments the you maintenance for Yes, from Pete. sure follow customers? guys Got get any it. kind up, maybe you and getting a

Aengus Kelly

passed the instances, material most leases, then any of way they have that parts, back year back nothing There'll come where some prematurely. And the adjusted with on. overhaul, four it be to lease if has get there, that's by have increases with engine airplane course, or if an etcetera impact I if the what Ron, reserve take inflation have end for that's to the LLPs. have there's rate part to see wouldn't for reserve happens maintenance of that as each But you Well, the other. the extent But you an OEM paying customer. one is then to you you'll having unusual. deal, the in the covered, the And whatever is contract wasn't risk with deal us.

Ron Epstein

Okay, great. very much. Thank you

Aengus Kelly

Thank you.

Operator

question Please from our will We ahead. DeVries take from go next Mark Barclays.

Mark DeVries

authorization thank million new I to us. Yes, bought of you'd Even relatively tomorrow, all you think that repurchase X.X at levered if conservative times below you. be back still $XXX looks The as CapEx capital, going strong full target. even additional where you year. the your generate for billion the very you'll cash And if be realize you to excess of flows, mentioned, it's X.X

capital So uses excess repurchase of about guys authorization? outside the how you alternative generation thinking are of

Aengus Kelly

at available, it. about it. thought I time. always sizing, this good doing we out Well, returning shareholders. now or, although makes Well, sense as buying different excess We'll we think about that's of whether deploy M&A thought, to at continue Mark, but aircraft, do to mean, is capital this as we And at M&A, have think or that that's over alternatives a that's moment, all the whether it look we way to capital there, And we I look unlikely

during to we'll I of this authorizations and most And, that. say, of $XXX will range you write a year. $XXX we generate go look expect share repurchase of if to excess north will million of mean back the historically, course a I were of in deploy As you our lot the billion capital generate million.

kind So out and on looked took do years as decisions. it's then us made it We a not with big, announcements. those ever two at we basis, of quarter-by-quarter though And to it that. came splashy

for to it. change see us So And about strategy. that reason any I don't that's how we're thinking

Mark DeVries

Thank enough. fair Okay, you.

Aengus Kelly

Sure.

Operator

It hand call appears over or now further speaker time. to remarks. this have I questions any for no would to back the we today's closing additional at like

Aengus Kelly

And operator. talking to to much, look months’ we very thank in for the all joining you and for forward time. you us a you call Thank few

Operator

Thank call. today's your concludes This you for participation.

may You disconnect. now

AerCap (AER) 2 Mar 232022 Q4 Earnings call transcript