Earnings call transcript Q1 2023

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Operator

Good day, and welcome to AerCap Holdings N.V.

First Quarter 2023 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’d like to turn the conference over to Joseph McGinley, Head of Investor Relations. Please go ahead, sir.

Joseph McGinley

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

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

and statements. may materially involve cause expressed those Forward-looking from or implied results risks or statements such actual uncertainties that in differ events to

revise call. law undertakes forward-looking no circumstances than other reflect publicly events, statements any AerCap or future that imposed to to that update by arise obligation information or after this

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

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

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

Kelly. will Aengus call turn the over to now I

Aengus Kelly

airline Thank to you return of another $X.XX. for for $XXX of earnings business XXXX share first per adjusted a past AerCap net of as million travel strong adjusted AerCap, the income of report for generating quarter years usual air few demand am our I to continued after and and joining and normalization customers. This earnings reflects call. the the events for quarter earnings us pleased our of

in collections our higher our generation on EPS end affirm of operating pleased at also adjusted previously was the assets. the and range. strong cash with of to billion flows am announced of I quarter $X.X Cash utilization guidance extremely robust XXXX higher our

years, positive that this am major airline prior announce in reflected be It industry continues clear pleased As all and to a new flows, the share million program. of regions earnings a is and tone to repurchase of the $XXX these of I is cash unlike now world. excellent result the

performance operating revenues. are main airlines their over airlines to years. Demand is securing sales, recently, record the and demand flow, see many and reporting growing around is coming the they across capacity metrics way bookings, enough concern robust address From next discussions their several with cash

are U.S., despite and of from seeing increase not environment. the higher return as last In year. where we And announcements Airlines continue TSA in towards uncertainty reopening the and through levels of carriers the pre-pandemic record are Asia these possible particular. to reopen geopolitical Asia, and airlines quickly the surpass on capacity China. European to expectations of routes frequencies in to the numbers accelerating the was rate levels with passengers

I aircraft the had call, years built company. I’ve of a business with we to So record diversification model, AerCap’s which for from track many rise. spoken have the continues our demand around since been up last our the conversations have greater confidence and about enhanced future by as earnings scale, customers times coming resilience has the

of many This be the significant and execution impact the of there stand the focus From we was have levels which level world on sets customer the extremely quarter. with where in AerCap that am headlines, on in course, of outstanding I that will always business. around create our pleased Of first reflected execution apart. consistent events no today, focus activity

purchases, transactions unparalleled agreements, XXX comprising XX AerCap an XX in our This industry. and lease which closed is of XXX activity During level sales.

gain broad see first based to On our margin. on at strong closing million and side, we demand continue $XXX assets quarter for the XX% of transactions sales the in an sale

provided our consistent business of facet shareholders over our that a years. is has many for returns This

there the spend to seeing outset, generally are we’re three At what only talking aircraft. we understand today. here that sell through like you why reasons to some time I’d it’s So important

first The exposure types. reduce to aircraft certain is to

from reinvestment just to the to is gain. are credits, is make a a third holding asset. asset airline second the where and The diversify higher sale never an the than We returns sell onto

so Put after simply platform. sell the the would right erode and gains you discipline quality long-term the of the to if right doing buy themselves knowledge As and the look time at have the patience at the price. to

last our at head of range a investors, fleet specialists, assets and part sells and wide engines In consistently alone, AerCap shocks other have airlines, various global owned companies. aircraft sold we through helicopters including events. the and almost attractiveness a the financial of to four buyers, years leasing XXX gain underlining

for is management confirmation aircraft an business. the run selling the how a best have Fundamentally, they team can

purchases As have your third-party it validates Likewise, of can the validation a values, assets. best are strategy. and shareholder acquisition fleet around company’s true the depreciation value policies,

airlines the the have in buyers mentioned, As have a months. stepped as potential of buyers as significantly on chart shows I particular, right In their up last aircraft. time. we wide the range participation for varies over side XX And hand

seeing more purchase from and frequent the demand ensure the to for have engines meet older are We they aircraft airlines capacity long-term requests see they to to air travel.

market our simply will demand announced further from other and the production aircraft believe view not airlines by that the financial Furthermore, reopens, planning expect OEMs we when buyers. the their rates that investors This do I for accordingly. see aircraft ABS and supports

buying over having inform feel no the but XX our near talks company has course external aircraft has one this demonstrated book that assets. AerCap over their sales are strategy? many their Of the that So about undervalued, of level sold course, X,XXX last anywhere and every years the well values validation does also of how

incumbent take it advantage opportunities. to on this is us these of Given dynamic,

up a sell sale on can from and our we use continue freed at shares to if the capital subsequently sales strong repurchase example, discount gains value. to fair these aircraft of For at

to continue significant will for create shareholders. value We our

comprised We equity of $XXX we year, of of of additional X.X $XXX a multiple. $X.X value. million million, that equity of these last a of share, $XXX with during up capital assets of sale, million average $XX March $XXX and age book per Selling XX example, then book $XX.XX billion share times freed excess an into at generating gain For repurchases sold years. million assets total redeployed and of million for

arises $XXX of This $XXX i.e. book XX% equity million million discount. from for a purchasing

book shareholders, of create the million starting assets with of we equity associated to additional from sold $XXX million value of our $XXX managed those So in uplift. value XXXX, for a XX% have

We today’s shareholder generate expect increase which authorization, from further to returns. these will value

was this quarter business. earnings another products AerCap with demand broad throughout for So strong for in the summary, cash flows generating our based great and

growth transactions our demand. as execute numerous day for customers continue to We every continued position themselves and

and you in to demonstrating forward remains years to quarters to and future this the in we confidence strong look the Our come.

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

Pete Juhas

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

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

letter per GAAP that we to of the quarter. quarter. for the of recognized talk affected In related that $XX of conflict, main into the recoveries net of consisting share. Taking first the briefly I’ll primarily Ukraine the for the during we million all drivers was received or first credit account, first proceeds our results that our $X.XX income about million quarter $XXX quarter,

on from to Basic an and benefit arrangements cash PBH strong lease we rents billion, our quarter. continue leases. are collections from $X.XXX were last their also hour $XX from the million power of increase rents This that in reflected lessees by

rents as the term a As I our assets rents. reduction of the lease $XX mentioned, amortization. reflected premium lease to basic basic million Lease amortized of are lease over remaining lease premium

maintenance Maintenance first quarter revenue for that in words, without revenues quarter. were rights million. higher $XX this other $XXX $XX In amortized were maintenance $XXX million during revenue That been the maintenance assets amortization. million the would’ve reflects or million to

the was strong resulted sales sale of owned very million. in on on gain We of sold total $XXX That $XXX of million of XX gain XX%. margin for our a proceeds assets quarter. sale for Net assets

of March of around assets we for had As $XXX million held XX, also sale.

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

payment time of of the $XXX place million Ukraine now the all received the letters We’ve of at in were of that invasion. credit

included impairment year. as expected the some and revenue. that $XX sales mark-to-market was by which million in of million first we was the of That lease last of Asset in $XX quarter, the due reflects terminations derivatives positive movement negative offset had derivatives. primarily unwinding on and million, Interest $XXX expense largely to maintenance was

net of our was leasing venture for investments earnings again earnings the for equity quarter, Our reflecting amortization expenses leasing the $XXX Shannon expenses. quarter engine in including maintenance Safran. $XX million rights were Support Engine with Equity under from method $XX the million strong joint million of

to position. continue strong maintain We a liquidity

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

driven billion by from $X.X leases as capital that with the a quarter. well over quarter We cash collections cash of a was was amount excess generate collection as rate total finance flow Our continued the above for each strong during average operating quarter. approximately XXX% significant of collections

similar to at remains last the that in X.XX impact from $XXX times, March. quarter a includes GE million our As leverage result, repurchase share of ratio and the

approximately of debt now as during same Moody’s to BBB of quarter, from After assets the total from Fitch secured Our upgrades quarter. debt and ratio last ratings first X.X%, three end rating also we flat as all agencies. the March, quarter, the average at the the and same cost major have our last was XX% was

billion just the $X.X of of billion term facilities, around activity, our and credit our quarter, bank $X.X included with loans around banking or unsecured which million and extension in $X funding upsize which of of to financing, financing along executed in billion, bond year, markets. some for We the of from most of from will likely the under remainder come X This dropping to of of strong the billion billion the requirement extension revolving $XXX from partners. $X of billion billion the our performance around results $X $X

activity. this strong overall, had for quarter So of we level transaction AerCap. a another again, high Once was

and connection strong. of was of Fitch, stage We upgraded with XX% discount worth $XXX by to book and the stock performance at Moody’s were a repurchased GE’s financial selldown. we Our million first in

we’ve purchase the mentioned, share also a million September. Gus new end As of $XXX announced program through

of full look the higher year we’re year, XXXX, we our end at for we guidance be remainder expect and affirming range. the the out to guidance our As for of

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

Operator

Thank come from first will O’Brien you. question [Operator Goldman Instructions] with And our Catherine Sachs.

Catherine O’Brien

much for so Thanks everyone. the time. morning, good Hi,

sales strong So the maybe have towards that target, versus asset help the sales $XXX you in comment more, just by And us on held $X.X asset the margin Is believe in think a aircraft quarter? a based on pipeline mix compares Can the legacy currently – quarter sale. is just about or on the noted far talking in of to sold driven excuse million Thanks. the me, assets? what how you so said, little a types the what age that you GCAS you billion for that or first composition. was I AerCap through primarily bit legacy comment proportion was

Aengus Kelly

buying, portfolios want were seen years the combination both that’s buying. today mix buying else Catherine, legacy see was and when no always us. And carefully asset when are XX from you or selling over last – of what you many if the legacy is of GCAS, you’ve a constructed AerCap and one

though business, I is a commenting strong strong market So converting now cash flows. few just the think and are of earnings, sales flows it’s but strong. we And the is points we aspect the have that market market deployment. And on the about cash that strong key is worth and into sales a now operating strong one capital

billion $X.X months, income. you, of Catherine XX AerCap adjusted generated book to income tax quote of a numbers the for $X.X last in Just billion of net has net after and couple

sheet, leverage down now X.XX that balance is if authorized We’ve to in today, acquisition, million – The $XX.X you of That’s delevered this, we’ve And times. we we $X.X by leverage debts, sales GCAS billion billion. the part Catherine, XX months now billion and have billion so our $XXX at of look providers. $XX.X are the to we’ve and to since shareholders. million. net of or given committed capital $X.X billion, back to the return That’s another December $XXX capital returned XX $X.X

we helicopters, market now see of into a are of all asset shareholders. is the It out for could engines, in That aircraft, sales, cash And supply, to that industry, product with we we see, could and profits opportunity, for converting be be several freighters. And course, cash demand, future out all for our continue being earnings it the function, all next look as assets into the we strong redeployed believe AerCap. for hard those the for demand years we the of the imbalance coming flows will strong types.

Catherine O’Brien

And Thanks much so a yes, in a M&A back record by strong that for team backdrop different including mean, of XXXX. Gus. I this track definitely supply demand in

spare look that links appreciate engines. fully on your just one engines Maybe faster versus, don’t ago? from the I engine continue Thanks and rates are expected, the driving give hear know, interest that. tech coming maybe time. just lease leasing than that’s sense so for on spare we for Can some to increased off you what XX of much airlines months So business, demand the new engines like inbound us

Aengus Kelly

supply changing. of for which lead is other long engine from over cases rates XX%-plus is it’s critical limited significantly don’t aircraft board. we we’re see, for engine for types, the not we new is they What to Like years, which there MRO parts demand up what that types. see – is types. certain up up asset seeing times, spare some in pushing on engine in several classes, the just the different the across certain And increases engines lease and to lack next a engines shops, And are leading of

will performance on of environments, As I the is and blades, long engines last of engines will engineering out By see just challenge of that to change said you’re into they through capability as envisaged as the masterpieces the process, these an cetera. et before, burn. get we multi-year. originally operating in don’t lasted But engine and wing to Again, predecessor mature improvements the on in fuel those issues, technology engines. are The over time, had these reduce performance certain that improve the wing. to you time parts that was

away the next isn’t will or this something in that So go XX XX months.

the way see increased to spare by world you to this biggest a for engines business. time going quite We’re demand know, as And for long come. AerCap, some is in the in

Catherine O’Brien

you Thank helpful. Super Gus. so much

Operator

with will Credit question come next our And from Moshe Orenbuch Suisse.

Moshe Orenbuch

those providing potentially more thinking given bit the couple scale as and sounded you’ve probably this your the value funding to and kind GE larger about a talk the as a marginal and you on need overhang. back – of discussion coming have your current whether opportunities? aircraft environment any also the sales, comments it sale for other kind capitalize little Could you needing of thoughts ABS market from taken description you’re of whether to created other that’s about to of buyers about as Gus, and the by well a benefits including add could of reducing marginally in that, that reducing you

Aengus Kelly

that’s Well, why chart and there. the put think, I up we Moshe,

slide we If activity X, the Slide you look where at – I show is, the sales believe by quarter. on it

of can are aircraft one buying. You dips of biggest quarter, to in the the world you we’re in there natural you and in the this asset good XXXXs how given And the see in size. done againwhat would we What when is a course seller, world, and was obviously, there, we’ve much pipeline. the our AerCap sales, see was of I bit no we’ve but that’s biggest QX trend of point there now the buyer huge else in sold airplanes was

market sure, execute if for the we’ll billion, is it. I’m on there $X.X more, do to expect We

and again, platform could in this assets in a see, XX you sold capacity of selling that’s you we to of doing capable isn’t And platform the easy quarter. have just one And quarter alone, assets the you have over just see it.

can platform that of volume type So that’s with. the this deal

there, stock. investment a buying there’s us it, So back tremendous the own certainly opportunity markets for in we’ll if think we our do

life, think a this example might that I isn’t the I happen future. at in example of real when fictional look is this and gave, you what

shareholders. of the at to at you $XXX the end By onto up. if We’re When for looked it slide, want out example, year, our book we’ve converting Joe, today of we that million on equity you pull the opportunities that added million $XXX started that.

recycling we through So $X.XXX book the $X.XXX And of equity turned it. of the of platform into was capability the that capital.

matter sweat, how it to in itself quarter can business, then be underneath see And the happening sensible you before work. AerCap ending bought to a this once and make has the platform release XX this through deployment XXXX the got all manifests exact look balance and is We that years then a And It’s benefit that the And of and that business that of same this ago, of in You back how no sheet, XX% a capital, at got it shareholders. to new. the and work between balance playbook that can’t got of lazy happen. to we for business. the it’s XXXX, with pristine did do sheet. delever is the means in that just transactions isn’t that our

not for So we’re before haven’t you here. done and working something we it’s hard

Moshe Orenbuch

as – depreciation your a I the Got basis net quick I think XX that it. up actually Thanks. after just spread And was Pete, follow-up, mean, spread points.

said comfort, think thoughts an give an been stable should I investors. area some think some that I should throughout area be I of people concern other that’s it’s Any you that but been had XXXX. think – for

Pete Juhas

Yes. Thanks, Moshe.

as yield lease was up our was that right, the and somewhat quarter you’re So well. up in

spread before. flat had as But more the what in results was little expected. some to first roughly do bit we the be net we I think, should this had mentioned than I had it overall, last quarter So year, positive year

about worth also I is that sell. a just of function noting think also the spread, it’s when we think obviously, that we – net aircraft

of the XX that selling age years aircraft some average old. are lot aircraft, a them So we’re of older

risk have Some of them also with have higher associated higher but yields, them.

And dampening those to spread. a getting so net have we’re of our out that’s on effect going aircraft

account factored going of those we I that to to The the this basically predominantly sell. to billion that $X.X be And in into going that’s are guidance older sell the aircraft. aircraft we’re that so going gave year, terms

But effect. net an has that to So we’re a managing spread. ultimately, not

We’re our to to share. our grow per our grow EPS, book EPS. want managing value want We

Aengus Kelly

And When risk line item that’s be net business? Moshe, So, that’s XX is important said, most line how the so important. about making one the item we profile the of assets The as they’ll yielding. higher years, ask sell age of and is what those people well, P&L. spread, are much you money average in Pete

creating So that? we you But bring you’re down sell stock what went if did back key at. with driving higher, shareholder of EPS that’s we in at We those them, quality portfolio some better net have value, the look because a the far assets. the going meantime, the off your sold out we do spread. to and And bought number side, you to

So when at look you’ve to got at of sales. use proceeds spread, from net anyone looks the

Moshe Orenbuch

much. Got it. Thanks very

Aengus Kelly

Sure.

Operator

Jamie Morgan. And Baker question with come our will next from J.P.

Jamie Baker

in you now behind your time, Could managing shorten least the guys. and mean, mean, are two-year really better. be you you’re the for environment placement example? XXXX? about back? like Hey, investors in lower aircraft and good booked I’d with and Ordinarily, placements might figure? see I incentivized aircraft current lead a XXXX differently hold at this, guess the I to to much I argue are afternoon you high wind to related speak back How placements

Aengus Kelly

happening ourselves, with two wing. see last day. what what the when Jamie, have seeing One, the And happening, it’s We engine for we what’s think, engine every of was was it. could of we could business great we’ve advantages one track. it global to happening see knew we portfolio time, exactly particularly every the was business here some coming in aspects engine off been to the and what Well, can week down the We couple I years. for coming the see saying it

with for scarcity. times. available, into airlines be world, and happening to What’s times see and are the longer less there’s that biggest be if buy if could turn MRO in turn airplanes the trader we times as Then going years Is more going to to know, wanted the of length you the turn future, you there’s aircraft. used airplanes more know

we were So we X.X trend way. year managing see and could it that coming about that ago, Jamie,

So number a we’ve in XXXX chunky now. right just the actually of actually, placements you’re Midland done for

Jamie Baker

Okay, helpful. that’s

lease that I somewhat of economy take the extension think given that, of of deliveries. XX% airline are air to sense obviously related exercising give the And or health makes which their disclosed yesterday rights, customers [indiscernible]

fleet. lease You’ve are gen that Is extensions a comment? lease got fair aggressive that than older a more gen somewhat second I extensions. assume first

Aengus Kelly

got before is approach. or because – barbell this key It really always few fleet a the times, Jamie, to think is the about, you’ve an I’ve fleet, old said a young

you’ve them. to If XX XX, A years because fleet seen good that and presentations, you more now won’t prior of buying strategy. XX-year fine have, get sunset a XX and airlines you and portfolio in have is XXXs, having is odd of XXXs years had out absolutely variance young them. them an thing need they’re not old asset, it the But strategy this we’ve because for

we’re the the we biggest our but XX%, are business. seeing is freeing vitally reinvest are older about in what’s capital is buyer airlines happening to So of the up what extending airplanes

Jamie Baker

the all lease and is on or customers requesting seeing aircraft extensions vast That’s basically helpful a I extensions But for the are of obvious of by majority you lease good get the strategy. reasons? difference age your

Aengus Kelly

being bought. are sorry no, only care. I have should been The Oh, Jamie, ones

Jamie Baker

sense. Okay, makes

Aengus Kelly

airlines key, telling are them. the believe what because the OEMs That’s don’t the

Jamie Baker

Yes.

Aengus Kelly

could so that. see And we

we leases, the there a is younger slide extend on airlines fruit. broad that’s older buyer but it’s base aircraft many interesting the bearing amount so them. you’ll the of trend some portfolio that new making. real purchases combination extensions, where certainly are yes, Are types, But and strategy over of the And is show stuff, years there’s the the

Jamie Baker

guys, appreciate color Thank you the it. for Got care. it. Take I

Aengus Kelly

No problem.

Operator

And with come Helane our next will question Becker Cowen. TD from

Helane Becker

of couple much, I very Russian everybody. claims your of operator. maybe Chubb one aircraft. And of, denied know, expected resolved in a ago saw and claims a kind Hi, maybe don’t should terms of the just weeks you about about I I question. I’m length time? Thanks that how thinking for On note these one wondering, are was that we just have think that? getting of How

Aengus Kelly

of one their the course, being Well, Helane, of insurers. They’ll have view claims. our of own Chubb

We have our own view has been spoke date of course, which we occurred for believe of is the right. we since trial set The that October one development last that’s XXXX. is

will that validity So we’ll see claims. when the the be all of

Helane Becker

Okay.

So right? a year a that’s That’s away? away, like X.X long like time

Aengus Kelly

Correct.

Helane Becker

question, when Thank in selling advance just share on they’re you can you. you of terms block, enough the I just follow do that thinking And be they Okay. in think, ready GE with then one authorization? about tell so purchase

Aengus Kelly

marketed to Well, to do Helane, a plan offering. when they go have to they to beforehand notify market us,

a find dialogue us do So back advance – these tell they made GE authorization. – think clear we’ve and good we’ve attractive, do we it got is at that we why did this yes, and prices buying we shares which with in obviously look, it I

market. their sell shares open down did looked the them last and or we with again in so that either we’d And or them to concurrently from with buy

Helane Becker

Great.

for Thanks time. you. Thank Okay. the

Aengus Kelly

Sure.

Operator

Thank come with Cacanando Deutsche you. next will Bank. question from And Hillary our

Hillary Cacanando

Thanks for taking my questions.

would credit versus returns onto wondering the be issue would of three reasons where more your is to more the airline sale aircraft high I just was reinvestment type aircraft One may get reduce mentioned exposure on recent of better kind reasons if to an assets. the quarters? that airline important is a so that. from example, were the view higher selling now pandemic, that an diversify which credit been be you have in So than three and during you holding relevant wanting less of think aircraft. – I to For what’s why level

Aengus Kelly

Sure.

I the instances. third in reason think that these is

are right believe aircraft ago, buy of the that just to they’re lot capacity. months the just now years or function of selling As are I that’s come minutes few several they capacity short mentioned to they a six else going the a XX extend short to And months, airlines. They airlines or wouldn’t for be it. the for airplane we’re a fact

that So believe us, stop the a third an driver we reason and predominantly think older the behavior is in, which main the for into that tremendous the you getting opportunity. course, buybacks, airplane then that of moment. money It’s selling at is converting

Hillary Cacanando

Got it.

of might of future future exposure is risk? talk you to grow Okay. something Thank plan to minimize you. That’s China about I direct out find it where want your business any whether And China that’s to geopolitical a very you’ve you reduce if the or to the immediate kind just any that then region with could just seen any if from earlier more in reopening. or your year, on impact wanted the this reopening helpful. And you in the kind in order

Aengus Kelly

you first kind course, opening last off, China driver huge to Well, if big of of leg look, of Sure. the will. a global aviation, is and up drop,

U.S. was as of behind Europe. in the And so that’s whole and Asian XXXX, happening course, Southeast lagging now, a

Now Asia lot towards the levels. dragged by Chinese getting XXXX up traffic tourist we’re there China, the that biggest biggest is of the is market and tourist actually outbound Like, a tourists. Thailand for it’s been catching China. market has China, in

Southeast all that recover, of which seeing we’re market helps Asia. So

so big positive. that’s a And

some it lessors As last over as is time reasons, the for but what myriad happening had Chinese been regards, years the for always time seeing you’re decrease. That’s of market. six growing They on China our our exposure to a of I’ve domestic so exposure have more will themselves. a has the over there, and focus

very of see well, as good we candidly. so China plenty outside And opportunities of

Hillary Cacanando

helpful. Great. Thank That’s you very Thank very you. much.

Operator

Epstein you. of Instructions] America. question from [Operator next will come Thank with The Ron Bank

Ron Epstein

insurance, quick What afternoon. Good your in questions. you Hey. right? morning, are a Maybe good couple of just seeing

Aengus Kelly

Sorry, could repeat you that? Ron,

Ron Epstein

Yes.

Sorry, can What now? guys grown are better you cover? me you in Sorry. that they to have seeing rates Have up? hear you your insurance

Pete Juhas

for did went yes, industry our insurance – insurance the as mean, Ron look, I rates our they – up Well, generally. did

wouldn’t So our not that ahead. years the further increases guidance we there past a surprising. obviously, reflected big in and in change But over We’ve was expect year.

Ron Epstein

I getting I’m the get think rates rates. to way, I if if is, But insurance mean, the up, your company, raise they mean, you I car went a if and in go guess right? you ding your your at point Like it you about this

the would… why owe So what of seems – insurance companies I something? they why it aren’t would guys or that don’t that’s know, like kind admitting just you they

Pete Juhas

that would reference would we a earlier be think vigorously the to that haven’t obviously insurance what pursuing obviously logical But and And they are market valid but from yes, That claims as is. logical be Chubb, it been is – a we’re heard look, them. we think, taking look, our approach. I completion

up market, have rates come hopefully, so over attractive as participants would down and look, would come those for them. time is in more that think because the we And hope gone we it

Ron Epstein

on Airbus why for for I your door, And Yes. it they OE seems and mean, little current helping whole when the I only there? don’t – you in are the across if the of know some I I’m sort and even of I mean, will and fair OEs to going guys mean, to it’s track saying different you, product out want be Boeing how deliveries, your stuff and pay the because predictable sense you behind thing. they get sense can’t Maybe anyway. on they guess, that a your lines, good what’s sales but But like And environment, – they what’s far it’s you’re yes. book deliveries? charge then back the to are more I it’s actually

Aengus Kelly

There’s It’s and about chain. motivations. Boeing of and not very differing in Ron. lot and GE hard a participants Safran. It’s Airbus the That to have say, just

supplier a going the can’t be impact. of over chain. over makes that you’re participants MRO more have several activity. lost OE out many skilled parts is that What money see highly have are Those is could If we participants last can in be an that the that easily also parts that prioritize the smaller staff You than case, there MRO replaced. OE years to

it. you telling them we’re for OEM the XX the raise concerned of ramp going wrong? take months, to do make thinking, it? month more of And out financially the next output What I don’t business. if that And companies major in to they’ve do I and these I XX risk. veracity that. it by goes and have become units if wow, better can levered can’t up I’m are a about capacity the that, I

up So OEMs, of there’s the about big a guy those you’re take that risk? lot discussions And down ramp want you to go going do to hear concerns if forward course, a and other lots discussions guarantee Boeing the of chain you production but ones ongoing. are on major the the you it, between where a engine you do there’s the small Airbus buyout around further airframer if levels. and ability aren’t can you have of and Because

of aircraft leasing So business, the look good there’s just look industry big nuance of a more But in participants of the behind the the real what engine think. what course, you it when they’re – see sales to indicators the than the lot than at you airlines, what guys. certainly,

Ron Epstein

the sense. right… like one, Do you’ve ton now mean a maybe little just Yes, think you it’s last you And do core? I I business. one Do it’s makes you then yes, you leasing while. think helicopter for – it? that it Do not? mean, a done of it

Aengus Kelly

was And to that selling it. us. bought pretty – expect versus significantly since to we there and And five market. seen continue. for years rebound well are four of and to a we course And gas. quarter done helicopter see I business trading where in business very for the it has and well We’ve ago. oil oil But us we’ve reduced the helicopters our you, mind gas or where that Helicopter is has done life now returning every you’ll exposure

Ron Epstein

the Appreciate you. Thank time. Yes.

Operator

our Sachs. And Goldman with question next come from Catherine O’Brien will

Catherine O’Brien

when Good we’re at years. the morning. lower time. I follow-up rates looking appreciate much for to Ron’s airlines Actually extra I fully – the lessors delivery over of XX-Ks, production and cetera, couple to cover, reflect to weren’t et for it. question, reset last contractual I Thanks it they so just really schedules think the

if just So perhaps talk deliveries production I while versus you shorter-term tracking sets like, these to suppliers know about rates? of are you contractual versus schedule there spoke months direction couple lot a the they’re demand a versus ago. moving issues deliveries, than trying incremental likely fully about of, just less can in anticipated for. really continue facing right smaller there’s just appreciating on I’m are we’re a sense to get some delays be how still pre-pandemic, aircraft

Aengus Kelly

spoke profiles But I still that would the issues last I months. And overall dynamic. two I have delivery for about cetera. say few guys ongoing that are the and the years, been Catherine, can’t they last narrow-bodies, wide-bodies different produce Boeing and Airbus year look the think and on you’ll et at see each in engine can they not or as what with

to hard it’s So on I that. think opine very

the it’s consistent last and say safe a it’s say course that seen reasonably the I’d to think of safe over we’ve bet years continue. several delays I that that’ll

Pete Juhas

add, will our XX-F, what you what is contractual be. about our when Hey look Catherine, have to there obligations, included when at so our those we’ve just we expectation

So it’ll be. it’s of best not necessarily the contractual amount, what estimate our it’s actually

year we $X.X full if this be year, CapEx. to still billion at look so around we to of going think $X.X billion the And we’re

not original far it’s So estimate. our from

Catherine O’Brien

of helpful. you quarter? some super of in much. as that reflection That’s that is today for is confidence first the sneak you maybe so increased a on to sales pointing go Or Pete, just the if prior year? more higher the throughout Thanks could your I how guidance the did – range, also you, EPS end one of what And throughout in

Pete Juhas

the mean, utilization both it’s quarter higher. we’re of I if both, the we rest and look seeing the generally, year. It’s environment first at the

That – in fourth the higher. first a cash seeing in the XXX% was receipts over again quarter. We’re

really on than line at the think that’s it’s I’d gave else. looking being last it’s say and And generally, I more driven looks So quite revenue I positive. where we been really the on just we that just anything environment outperform. would where mean revenue good guidance quarter, the

Catherine O’Brien

questions. much. extra so Appreciate you Thank the

Pete Juhas

Sure.

Operator

we Stephens. a Caintic from And Vincent have with question

Vincent Caintic

Thanks questions. my for morning. Good taking

and the or end selling the strategy the each of repositioning of be how overall if Thank barbell on mix, you. of wonder the in your that on barbells barbell of book. question improve as and just first is Just that you much much portfolio you kind could perhaps quality interested of you’d portfolio how disclose

Aengus Kelly

were at slide portfolio. Yes. Sure. biggest deck I basically And as and will for That’s players in last appendix two and XX, mentioned the what there the strategy traders world us. XX aircraft And if But the so owners the to portfolio attractive big made we years. we before, it the the two show look same AerCap on of GCAS. of the the you had that the and have industry airplanes in

Don’t fool’s being a gold fall a of airplanes of the for portfolio. young good indicator

if be are or the nice shares it’ll to can having XXXs young XX, your for a a show XXXs which going portfolio last they’re or lose average that airplanes years. are brilliant ones XX But of age, them. going to on AXXXs, Young

if You us need GCAS that. you to all were understand today the same. look And at and

if They we’re you’re sure tech, tech buy assets, make to old have of run going end said new they’re to buy don’t assets, buy going old.

exactly the years, – it or exactly off the eight into see in see the pretty have under head but to today, where which us XXXs, next cetera, sure And you current of is my just XXXs, want be. new odd well want where so you very top that’s we’re demand at expect balance don’t is is But et which XX% be age XXXs, XX% And you high-teens, the I for to seven can here, we I the strong average because that’s to the is for you’ll technology. look if tech. then

don’t companies. understand investors strategy portfolio gold. these to old. need they’re to that’s through years be look You seven of want things where only holding That’s fool’s And the his if today and the

Vincent Caintic

that could and billion billion thinking terms on And you then wondering us Thank Thank funding that the do markets ramp remaining if to you’re this Perfect. back? Okay. see in need you, does think markets. unsecured for to about $X ABS year the the look? just $X Gus. update to we the When maturities you. you And markets, what how of fully Pete,

Pete Juhas

Vincent. Thanks, Sure.

the of a going the funding lessors, and expect seen issuance we’ve as bond done and performance from open date aircraft you’ve but we do to to all some market’s I is be said, the of from to will And market. amount in kind that year. that we’re billion still bonds Most to periodically other we’re of the So that market. away for we around going in $X would the that did of and given as of funding. expect be our first $X go And would look, that throughout and that at of to obviously billion to fair the But looking just other to the the the most outlook, remainder funding quarter, so the markets expect of bond recently year. well, we do I as

been wouldn’t more the It’s relevant not future, we’ve that strategy. of we ABS selling. And direct really I been guess, in something really at but funding really – many done. market, of of for been ABS I’m the we’ve market that not look is sorry, That’s a years say to part aircraft not the for that our it portfolios it’s the hasn’t on buyers I mean

start back, forward will portfolio coming terms think or I be you when market point. buyers sales if further so to of at aircraft benefit And should comes that more that that in that because market that see

Vincent Caintic

Thank Great. Okay. you.

Pete Juhas

Sure.

Operator

now Thank conference you. for to remarks. does any I’ll And that the conclude or over turn you closing the question-and-answer back session. additional

Aengus Kelly

we you Thanks, operator. to time. joining all us months And for thank and today to in forward three talking you look

Operator

Well, today’s thank participation. And that thank you. for day. Have an conference. conclude you does do We your excellent

AerCap (AER) 2 May 232023 Q1 Earnings call transcript