AER - Earnings call transcript Q2 2024

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Operator

Good day, and welcome to the AerCap's Q2 2024 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 Aengus me Financial Kelly; Juhas. second Chief is Officer, our Officer, Executive and to conference today call. With our Pete Welcome our Chief

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

copy other and by statements. may materially presentation involve call is cause can that our be to expressed issues found is those archived Forward-looking August information AerCap for earnings aercap.com. This in from of could call. Further are website simultaneously or forward-looking or no release implied results revise at imposed the or after AerCap's will risks arise to statements A future being or dated statements such aercap.com than actual the conference publicly and available update webcast uncertainties affect to this concerning that circumstances in at earnings law events, that undertakes on obligation differ call that performance and events public be any release to open XXXX. information materially replay. X, reflect and

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

analysts limit one As a I the to Aengus would ask I Kelly. one question to reminder, and will over themselves that follow-up. call turn now

Aengus Kelly

constant of for to our collections income Thank reflect widespread you net results quarter another report strong of share our focus pleased million earnings for on generating of assets, cash strong earnings am adjusted per joining us for These I for XXXX our and second demand execution. and call. $X.XX. earnings AerCap, adjusted quarter $XXX

our guidance approximately half have not delighted to total XX on in including aircraft. customer, $XX.XX, to $X.XX the course, year second with capital on [indiscernible] organic from X our a third CFM closed over on transaction more equipment have we the result, in Day. Year-to-date, am This for of the months the a basis that growth and the million we and I with returned $XXX Capital flight MAX transaction in last form taking XXX increase year. On repurchases gains for commitments XX Spirit sale the Markets engines our shareholders to closing the customers allocation, purchase to of with earnings in $X.X the billion As and LEAP transaction at bilateral to SES this with a that announce This quarter Airlines. is, over addition of spent to announced neo we aircraft of stock dividends. the is our

without this sheet. was levering Importantly, done all balance up our

payable $X.XX highlights are the AerCap QX, announcing early We showcase which platform. for These of will also another the power be in share dividend of per September.

high in consistently As I mentioned, aviation demand levels to as assets be robust continues of our activity. reflected for

executed months, at at Over elevated continues and across purchases rate XXX engines agreements discussed transactions recent lease Day comprising we in the of X and XX QX. to The XX% extensions, last which aircraft, XXX aircraft Markets over be helicopters, AerCap Capital our of sales.

as This And Chinese margins strong in to for to to aircraft. keen our of buyers combination equity. is is are end the note, XX% for U.S. from aircraft some I strong as be the revenue due strong is of the leasing placements market of the demand at leading XX.X% at other the of to gains time. Of generated sales this case shortage of revenues. the will aircraft. our our QX, largest the On system to from to was on book who and U.S. XX% of expect gain of aircraft quarter now continue into well the the sale, unlevered X.Xx approximately side, sales companies other supporting or in over airlines access

of XX% from its represents now over XX% China our result, peak. a at [indiscernible] down As

the XXX the with and including AXXXs, delivery side, XX of AXXXneos equipment XXXs On new AXXXneos, our aircraft, continued book. technology MAXs, investment new from purchase in our order

We were technology new also engines a CFM. for XX took mostly further LEAP engines, of which delivery

said notable just deal particularly beginning at the Spirit we was the of call, Airbus in week I the this Airlines As one signed U.S. with and that

others and and with XXXX purchase We bilateral payments. the to profile would simultaneously. Furthermore, the order book have we customer support an for from agreed directly been set with aircraft our This with sooner transaction backstop in and takes is the the and outcome deal and year to in results similar The result otherwise will example. is delivering on absolute also relative In to family appropriate long-term and the from the in transaction respite visioned will results order a that and where into opportunities which needed. deliver returns strong gives cash to sets risk. AerCap's added been of over customer a of share Similar able and but be repurchases to a customer related I can XX its aircraft of smaller would organic in AerCap we additional approach our system scale. cannot will last dividends, able XX take family is a we've disciplined a customers. months, this us. This in of to in a AerCap aircraft. has well our itself delays growth approach that because our our AXXXneo but also. on for apart come. with the and not to level and onwards. This measured where there match advantage is ensure aircraft to up us assuming is change time we win-win another pre-delivery are Spirit's step than experience AXXXneo total XX, the existing basis, organic if book Spirit's with to Airbus to third XXXX execute example to speed when perspective, flows far We aircraft shareholders, number financing This just long-term ability, These AerCap generate of in provided a X for strongest to opportunity of aircraft XXXX, to negotiate are have order to an of AerCap. These this basis OEM to rapidly execute airlines and also acquire for our over as aircraft deliver some industry, book, well as an XX from confident aircraft growth the am

and the generating dollar cash in all was approximately discipline, the flat a our strength This assets by are are rating flow where also basis set S&P, flows cash recognized XX% Fitch. outlook on to sustainable lessor the in world rating appreciation our companies, These this ongoing recently with run BaaX major balanced stand-alone ] Moody's, [ by aircraft ] any credit was by and apart. way. was are and the a a highest of operating on positive we any of We BBB+ X leasing in BBB than put other how us large up of AerCap ratings by more and agencies clear per along of upgraded [

on was assets, AerCap our strong summary, another our in with momentum generation for demand this positive and credit cash for broad-based ratings. quarter great So

and investment, delivery through to I evidence hand opportunistic We look our share to capital organic a quarters performance call order favorable Pete continue to of of the With detailed in see strategy the and for years to to deploy review forward come. the attractive will quarterly the and over that, outlook Thank you. ongoing of this for financial XXXX. repurchases book, opportunities showing dividends, and

Peter Juhas

Good Gus. everyone. morning, Thanks,

was Our purchase million, GAAP net income million was for quarter impact lease $XXX lease for adjustments these million, maintenance of accounting which maintenance was amortization maintenance $XX $XXX $XX tax That the $XX of included rights effect which $X.XX expenses. The or a amortization accounting the a reduced which or share. revenue, quarter, million purchase million, of $XX million The of rents, $X.XX amortization reduced second $X.XX and or increased share. leasing of premium adjustments per share. basic

lease assets are That to on revenue premium income rents rents. of million to that remaining amortized million calls. Basic account, coming results drivers share. I'll aircraft slight of was from million our rents which basic revenues the reflected $XX that all as the reflects I've rights the quarter assets mentioned $XX off premium taking $XXX the go to is previous second maintenance were earnings basic amortized per million. of through main That's primarily arrangements, last our that over were power-by-the-hour Lease lease lease the quarter, adjusted lease Basic Maintenance quarter for lease quarter. quarter. billion. of the for a term a amortization, net second reduces during $XXX were affected reduction briefly $X.XXX which or due for rent second the $X.XX maintenance rents. as So decrease into lease

this second So than XX% $XXX to of would quarter on of resulted higher lease margin XX payments of due of of revenue the received $XX amortization. were during for Maintenance That for higher unlevered for We an in that due the sale quarter. that's assets normal end-of-lease in the assets higher revenues $XXX to primarily sales million quarter. and maturities. Net was owned million been on revenue gain during without timing sale sold we the gain words, other $XXX or our of total this quarter, amounts maintenance the have million. quarter million

which of Other were out spread second that seeing than the $XXX our had interest basis but which calculation increase pointing due $XX held income to points, worth include June higher net certain sale. for not by million would million a income, we're impact interest year, income. quarter, It's income cash greater on rate expenses, that environment. it been interest this include items. Interest we historically. If XX, is we our spread consisted interest higher the does primarily has assets for our has been of quarter interest of any income net As includes XX to around but of and income worth higher interest onetime balances the was for

basis XXXX, example, have XX For in impact points. only to would been around COVID, prior this

we million expense amortization primarily we payments, were interest for $XX $XX more for Interest quarter of tax aircraft, million of and expenses offset quarter, the quarter was mark-to-market million related these And XX.X%. million, expense Leasing million of During rate were returns they impairments the end-of-lease finally, derivatives. and was $XXX an tax on the by $XXX rate maintenance which recorded which compensation asset million the second to second rights effective than losses $X income included older of revenues. quarter, related $XX of maintenance for expenses. where represented including received

continue maintain to a liquidity We position. strong

We've XX-month next our was uses over committed billion. That $XX the coverage X.Xx. well to in $XX And total can around around billion. facilities, next coverage ratio sources to see [indiscernible] target of June cash approximately coverage compares of today, we're you cash X.Xx of unsecured still been excess we've $X X.Xx estimated months liquidity, operating which above over the and to and million cash closer of resulting of including past the As flow running revolvers, XX, is where ratio cash of around sales from other years. XX increased of our with target generally revised this couple as

ratio the leverage Our of at quarter last X.X:X, same the basically was end as the quarter.

billion which was strong the Our $X.X by was continued driven operating collections. approximately flow cash quarter, cash second for

some to Our secured of June. size secured quarter facilities. from assets of the due our end reduction at was XX% in the ratio That's the XX% debt-to-total last down of

of primarily is due for quarter, cost margins. at average the lower term debt to of some which from second the quarter, was down Our refinancing first X.X% the slightly loans

an $XX.XX quarter, of for price $XXX the repurchased a million. During at million average we total shares X.X second of

including full guidance of not first share in end We of range. the we June $XX.XX including given to share a our sale. XX, also On dividend first quarter. increase $X.XX the gains top was raised in on And the of any second the quarterly over months. In we paid book of our projected the $X.XX earnings earnings for $X.XX strong per higher which our XX the performance last as an quarter, February, last is of per adjusted to call, year that value share our XX% revenues, XXXX, maintenance

now of takes $XX.XX second XXXX, on adjusted performance not sale approximately of the new gains when half gains the higher of of guidance EPS and we're during us XXXX approximately the our including had the our add year We've any $X $X.XX revenue maintenance first any on year on so estimate rest half gains, around including raising gains for quarter, adjusted revenue to that not year our year, of full we sale. for second higher a the year. including of and in sale for positive to those EPS the for full strong outlook Given lease the of

quarter. perform to AerCap during well So overall, continued the very second

leasing as aircraft see dividend. and is paid and capital reflected quarterly of sales for environment We we attractive asset the in all stock the buy of margin first continue as volume for strong We're a deploying in this opportunities which continue engine across to our quarter. our and particularly sales, back leasing towards to well and both businesses, gains

We and greater continue profitability result in turn financial in to generate strong flexibility. that cash greater flows

were upgraded continues we BaaX S&P and outlook the trajectory now quarter, that we BBB+ that This Moody's put by several rating years. on and positive to had by were we've to by for Fitch positive and

open now guidance the a full positive results operator, year and strong for for going these with raising call With And now with Q&A. that, can outlook our we XXXX. up we're forward,

Operator

to first JPMorgan. Jamie with go We'll Instructions]. Baker [Operator

Jamie Baker

against deal So different guess, a XX mean, asking said from you additional potential ]. airplanes, more a wonder the for remarketing taken just Gus, plain insolvency? but out that? it's steps comes I'm Spirit a to you've is another, customer, it think the or not, And [ transaction? can look, XX this believe So deferral a derive if I weaker not we backstop the you you is you on to if you to I how what effort called handle deal vanilla have to credit. Spirit I protect

Aengus Kelly

us most and shareholders. needed extremely think world, attractive XXXneo, our in be Look, in impossible that them a It XXXX attractive allude to we provides slot, ourselves the for and would much is get what some this Spirit. in you Jamie for It with liquidity. aircraft the -- time are provides I to believe of the us here, as terms a XXXX for attractive win-win

every genesis the world. XX airplane somewhere Jamie. behind really in like that that's an the So hours, And

Jamie Baker

same all [indiscernible], these Okay. hearing have down at Fair from enough. disagree. guides massive airlines. we tight how second, time, aircraft don't so But keep is, the we And supply then about and U.S. several you

that having The results Western do You've soft. supply. quite a airlines, service full And Singapore are got we're some guiding reconcile to honestly, mean trying and How realities? I reconcile hard airline you were with we're well, both discounted results aircraft those yesterday X down. time.

Aengus Kelly

to That's when the it of. there's point that much in saying United yesterday, number huge make, just And MAX there's extending having of $XX a [ fleet to tremendous to Allegion airline. is large you How but one very say is airline, they have, hard complexity the they had which that a the the the also within analysts keep trying Jamie. very very a associated very inefficient airlines shortage of on aircraft States? are of get a with capacity smaller aircraft. What explain ] fair to you a the is to want hand, out out not like million cost challenges What It's a called can have carriers moment. market excess the at the Allegion

XXXs, if or you're will or the the neos an airline the pilots. MAXs trained have you short and So you're

will You spare parts. have bought

have than for operation they don't would because home, will average being pilots aircraft. When wouldn't they but have. effectively, you come, entry your of hired up lower so sit overall You them, you've otherwise on have hours don't geared the your those do you worked at

cabin that from are having maintenance to they airlines have that assets sector. leading complex inefficiencies that keep complex they costs the configuration to standpoint, life the a have that prolonging of the are there to standpoint are these older, not hidden more So airline in and more are in they're prefer

particularly accelerate so transformation we're in their single assets, leverage operational when a if because of aircraft, to them, that's asset, efficiency of say only one the we harder when all type saying, could the looking, operating particularly shortage and new operating would into airlines aircraft that fleets, multiple So they're do. we're of give they're maximum

such How driven driven next bid thing fine for can older us. by a Jamie, you a the for see that's bid the So seeing really older strong strong engines. aircraft? candidly, engines, is okay, by well, it's We're aircraft then

the that OEMs. to avoid airline, If buying that. But by to know thing massive do problems that or through I spend shop going Boeing to a I and that? aircraft full and Airbus million going with are for airplane shop you're do avoid XX-year-old going the engines am there it's put business half-life performance and the restoration, I can LLPs, to end makes -- of the with an of a you're last am $XX [indiscernible] and way the you them I overhauling. Is thereby engine That have this the no a and do If through to saying yourself, half-life engines spend on decade. sense

hidden hard the expand lack delivery the new we day and of cost are with across, to these there's can the the dealing out upfront aircraft complexity. get and for the to due it airlines -- of of in, that's when inefficiency the So things a we're see of in airlines cost day but very the them that's that

that's you're So it's extremely hidden are I'm costs. yields on cost the and airlines that. to on is about cases, line your There's do a that's so seeing also because no a but a questioning airlines, some could high question people that -- to the not for point still well, what on But better we in drag big global that basis, what see. is out --

Operator

next with go We'll Barclays. to Terry Ma

Terry Ma

an the or there And those you are advantages X type, about to a order OEM talk with done kind timing returns what's that? similar market? you've any come of Are particular seeing to like of driving the other Aside mentioned bilateral just one you getting? you're differences to maybe opportunities aircraft pricing Spirit. So transactions compared more or from

Aengus Kelly

again. the years, we able another And know, we of opportunity over best said, OEMs buy makes if the you for that. business. regular don't to I we last airplane the care not I return And it care on obviously, as order, is if few have capital terms risk by fine our me. with deploying the for look, reward a it talk where we shareholders which I've the OEMs at always term to about to reach capital, do orders. with Well, the never OEMs the we long an certainly, been your got

Gold able earlier [ were a and the well we In and we to deal to [indiscernible]. situation provide assistance to ] were priced the were long-time with an customer assets, instance where like attractive a was transaction, Spirit what it get able on we felt

we're sense getting of So economic assets made felt that the we for time terms in and our shareholders. lot a frame

Terry Ma

Got don't X know that, Pete, outperformed manage guys the a it's I a quarters. then And it. for question but you the for spread. bit net last to

should into body bond how Taking coming the about about rest by we the the into which have due cash So account And costs power bonds, also have you at guidance spreads any our expense think the you the basis in that later this I'm on interest beginning of collections few a remaining XX your year? for come the credit and contemplated refinancings. year, of bonds year, sure points. lower

all the maybe we that together, net should how think just about So put spreads?

Peter Juhas

that. you're Well, Sure. about right Sure.

raising obviously, So year plans factored for all debt into our our net later spread this guidance. we in of

that off coming has reverting regular I by recently lease So [indiscernible] of basically, before, the power driver main those and mentioned been leases the arrangements. as to

now. happened all basically that's So

further for year, quarter you should countervailing for were effects. see I that would around any from second think this where as the we going we quarter onwards. said, because, this I be balance of of not we're are impact So the to there say,

in. On the you've got higher hand, coming one rents

I we'll are expense other, you the think have some where interest but higher be today. as around well, we On

Operator

Orenbuch We'll to Cowen. with TD go Moshe next

Moshe Orenbuch

Great. Maybe a following of line similar kind questioning. of up

other quarters? do you that there or basis of of all do kind evolving? the the up the might anything see how is you mean, of sheet are that? I opportunities, spot balance on Given see, next things like or to a Like that do be stable sort come things think few you over that kind going larger

Peter Juhas

Moshe. call the again. back, It's to good Well, Sure. first, have you welcome on

of CapEx. half sheet, the had due billion terms in So expect remainder. and about to to CapEx We're first second would the we the over the during expecting during year, the of that's We somewhat during the primarily of $X a balance half year. it $X billion grow little of

that we But done through. also all will mentioned, as know don't if come as some well. Gus we've incremental Now deals

increasing somewhat well. that's going factoring driver well. at then 'XX So of as of balance for our as will in we in also look out and to the really XXXX be of CapEx -- sheet, balance as it the in and increase some level sales the

Moshe Orenbuch

you ratio of upgrades how share that current of improved Can about and first the the And quarters? thoughts on several that your and capital has deployment year. leverage it's repurchase think about started but you recent manage course over over the Perfect. also to as Obviously, the your congratulations in How environment? dividend. might the next of you've actually you half talk do forms the the other

Peter Juhas

Sure.

So net we look, to at as this you X.X:X were equity. mentioned, debt quarter,

is that level. about we as were our last below So quarter It's well. where target

get So obviously positive very point. it's to been that to

the of much really it we depends do CapEx closer the half. capital. of the coming less below to think we It of that. somewhat on first the year, of a but sales I target, because second in lot excess it we've I remainder have year, CapEx in think Similarly the how on half you deploy. Obviously, will we'll create little depends more still be our a the run some done during

billion so $X.X far this year. of sales done we've So

year, probably for take. the or give I full think we'll do X.X%

get we'll But loaded. front-end X.X%. think ratio, been that's leverage I that our somewhat don't I but will to trend it So think up

Operator

Citi. to with We'll go Stephen Trent next

Stephen Trent

on mind of term, hope guys do Actually, and Longer have you where in credit really bogey question. rating follow-up S&P? The a of speaking, sort looks sort be Moody's any the you side to Moshe's roughly first with good.

Aengus Kelly

to there -- We on [ Fitch we're is think They're happy well. BBB+, over very lessor are which with rated independent certainly the push world. line in outlook as want I highest ] is positive. less the BaaX, the Look,

basis I I it's which Fargo. extremely JPMorgan like funding. unsecured our think of XX, around this an provides X-year If XX Wells points, XX north about at or basis look points competitive is spread today, someone

lower, competitive. We're we to of making sure conscious very and between shareholders, shareholders. access organic you conscious debt So that then that significantly 'XX some for significant at very and balance we dilute growth. have to would in pools that's We've deploy much and how extremely today, point, of always But we're shareholders we a went to on returns shareholders. return those, flexible course, returned very of the the billion equity and again, our of our though the capital And if our our $X.X 'XX. for debt. saw

have remaining million our current $XXX buyback a in left share We authorization.

those the between very rating think it's is items, balance happy but so a I with And today. where I'm all

Stephen Trent

biggest really Okay. the my you've just market, refresh I being you appreciate in one areas as the helpful. guys drawdown you if world very some -- China. the And guess, momentum other seeing speaking, mentioned you're the of at where any memory good done my here. quick moment. U.S. geographically Could there's I follow-up

Aengus Kelly

the I XX%. to pretty the keep and world, That's that from the moment, want in they across have. certainly true -- what levels, robust extension saw the you think at there's airlines demand

majority vast basis, indicators start global we're of with. good very assets, the on the extending So a

June, being down that's The will X% predominantly COVID is traffic because down in we'll the we exceeded XX placement Pacific -- out see Pacific certainly XXXX slower than Asia the strength we're the we to that and in Asia market, we're the and other by the growth, Americas traffic been we has I of Asia think And seeing continue I a out -- of on which recovery. If it's terms predominantly to in driven East. European Middle XX, traffic XXXX. is Pacific global international going at of about or think see where recovery points driven. is In X markets. region, international look strength And despite June after international traffic major the decline

of our aviation lots buy there's see X,XXX will perspective, region. year. said, back. I a come suspect in we at us to that So from least But sell look, of room that we we'll course, assets

have But reasonably AerCap's the perspective, needs capability rapidly we the So the the it be. at infrastructure, if underperforming robust performing world. move region around to assets from from region to an moment, to it's

Operator

Deutsche [indiscernible] Bank. next with to Hillary Cacanando

Hillary Cacanando

to you're since they're Just just the before wait regarding Spirit. were at if with XXXX wondering your I order from But would book. was an wide-bodies. it's was just for but the and being for place imagine with how transaction they see directly what narrowbodies to order Obviously, Spirits' past deliveries wanted Airbus [indiscernible]? would what wait taking long be this XXXX, I the time you

Aengus Kelly

really, commencing at would XXXX particularly beyond. many -- and the those it deliveries XXXX orders side, any XXXX the XXXX, past orders Airbus I in is is I airline of XXXX, mean and recently either, have Hillary, imagine part we've seen on moving not getting things in

the 'XX -- The time 'XX, our way from is a much out time very long feel frame. a there. frame, that's So more we perspective, attractive what

Hillary Cacanando

same case say as until for would the that's and you out And XXXX? of well terms in with well wide-bodies sold [indiscernible] Boeing being as

Aengus Kelly

be -- that much more it ramp-up much one to not get before it's you of for line would an on or available X before answer. be be think XXXX. on won't the Hillary, function but wide-bodies, there'll XXXX, a XXX to I on, it's the but be they order, get And wouldn't might I how I the wouldn't many. short fair imagine the

Hillary Cacanando

follow-up a just question. then And it. Got

buyback guess, well. very been I stock value trading about very the past. book above Does buyback the the is at strategy change accretive, stock think as successful that should when forward book with much? not strategy your obviously, going Your has But was in value all a your obviously or strategy we share trading it's your wondering and, how I

Aengus Kelly

kept We've year. million see, I $XXX book, deployed can -- and in authorization. the of lot Well, for our it look, million the year, have throughout we mean, you above $XXX Hillary, buying as we we've shares been the was

very selling and we're -- book equities. at to big So premiums assets

we've at XXX% sold capital. quarter aircraft it lot between buying debt what of it our we matter. Is this And few organic that use transaction. look latter M&A? where transaction always engines down? pay at the a see we and can was in what's Is for the Is done engine it best the growth months big of book. But for then aircraft You Is the again, or look, another is buybacks? of last quarter the

always for best our what long-term just we the pick risk-adjusted will try So and shareholders. generate return

Hillary Cacanando

you our And Got at in September. conference it. to looking forward seeing

bet. You

Operator

to Kristine Liwag next We'll go Morgan with Stanley.

Kristine Liwag

you And mature [indiscernible], Peter, there's engine can economics Safran. engines. more size of ] with the aircraft next-generation support versus more provide leasing? your how [ you How about discuss for think leasing very traditional Shannon And spare for this details large the could can JV [ you about of strong be? ] demand Engine the

Peter Juhas

think think -- unlimited not to there's that the business about commercial depending think way XX,XXX -- got on large service, aircraft. There, growth to mean spares I is engines the potential is the about XX,XXX, world, it's for ratio XX%. you've type say, and XX,XXX in XX% about business aircraft excluding in you sparing I it's because small but the -- I'm turboprops the about, if big, engine in there's

the XX%, say take That's service, XX%, you engines [indiscernible] engines. this XX,XXX X,XXX there's if change, So size. X,XXX and maybe portfolio, that's in sparing

the fleet to will grows, clients world will XX%. grow then you As disperse ] -- by [ XX% the of aircraft have

works. it how that's So

doesn't you've a its sparing. the holds I value business it's the term market right the there's an And business aircraft engine. economics When engine an the the comes it value as engine engine different depreciate to tremendous it's tend So it's if of overhauled. aircraft over of model, long slightly model only to different unlimited to -- got amount said the because because the not really

the engines, engine back -- of you're time. fair the lot the to side, a be engines. of depreciation because over the money say your and the And aircraft you it's end, value asset, first on make then of the to on fair. the is lease So slower managing in your created Whereas business at

the So say how timing in X businesses there's work. that I would difference a

Kristine Liwag

monetize models interested are engine in exchanges. this other see an company margins more was EBITDA a time, work be seeing or shortage Great. That's [indiscernible], more I MRO-type or and wondering And very engine it more to is with But full capitalize modules businesses, helpful. something leasing doing at of as like XX% or for starting the expanding either kinds wrench-turning we're mean lot follow-up, a try how to a those type job. it like same that? I it's in plus. into labor-intensive, you we're business

So a your would you that the and just Do attractive shift see that? leasing as out for business? see be expand to you engine spare appetite checking lateral that what's

Aengus Kelly

get those engines, to your things engine overhauling all is it doing going you're course, all a We've nothing I people. be don't But out think time. margin base. module our you manage their would and doing years. comes I'm And while but We work EBITDA looked to But do new talking, at would it like been into our company, ever for say you sops, huge. as that margin. of cost I'm when do if swapping. the That's I we're [indiscernible] XX sure things. EBITDA to that it you it

maintenance. internally biggest our example, apartment is For

the for we our engine department, of how there's it it's the shop, saying engine AerCap's an controllable work we'll at that profitability. ] we'll engine. cost, shop, it's to that. [ work usage the say, Then need your every part going how through to okay, when done engine to on the and because be going go but time Every of into be needs of estimate want We'll an repaired, what airline biggest we important and that technical be every done with that be done being of when want year utility single work sure will parts excess not is make out Our that is all engine. We'll to manage you drive done the it's in and site it work shop, looking the there's we month be we'll on track being that a the engine. engine on the

[indiscernible]. So -- engine which They type, many and we wouldn't have experts every have in have.

so inside out low-pressure every portfolio shop the we costs. turbines would of know those [indiscernible] things. order to high-pressure, say -- have that do visit in your yes, engine in really You But all I type your

the for margin? As EBITDA

Peter Juhas

it's XX%. around look, Yes,

business But obviously a unfair interest yes, to for financial because EBITDA Okay. XX%. be big margin bit look an around is would It's a a component. it at

Kristine Liwag

follow-up do that could if on sorry, a I And XX%.

margin? want capture just a sure. EBITDA I business, If make you that were also to just to your is engine XX% exchange

Aengus Kelly

mean exchange parcel to every do about of engines [indiscernible] we everybody I new that. Engine [indiscernible], every a business. fair, people and part be exchange is engine lot sorry, exchanges. do that does part It's sell To in the day. There's we mean is it. just who single day nothing I reflected there.

Operator

next [ with Susquehanna from Financial We'll ] take our question Group. [indiscernible]

Unknown Analyst

lease you were ] due maintenance relative Anthony bump? revenue maintenance timing elevated elevated know a we little Chris. just one-time to you do forward? [ historicals. a the recent is this rights that of quarter to on I as expect adjustments this returns. Or Should treat The This for going for mentioned was

Peter Juhas

are mention there here. elements X that Well, of I would that,

really, of think this had that year. more new leases first So the existing then revenue and their on return we are due to we leases. had I events aircraft These also the in that maintenance and higher on some that quarter And quarter do going happening. from of -- has been

-- those those of quarter. during chunky So pretty the some were

of so million so, I'd first overall, at that timing. it, half and look or say relative I $XXX call our boosted is earnings million $XX by, maybe some And that really probably if

think half So the I higher it's in that first been year. the of

leasing -- we lumpy just Some revenues run there. rate it maintenance of quarter. The $XX expenses just an a of basis adjusted happened that normally around normal brought on be to think was million $XX less -- like of would million to

of is quarter. quarters. And that's happen, that But again, terms high. events. last this When high that in high So maintenance again, events by then been driven amortization timing. has And really the rights that's of it's been the just amortization, also the couple certainly

So you'll generally see those in things happening tandem.

Unknown Analyst

it. as of Got control expenses year-on-year year-over-year And you almost line? XX% helpful. half on in was solid One were and adjusted a should doing well? more the as that anything cost -- the to down second very XQ Are well. leasing That's year-over-year XX% differently decline kind down the on we expect

Peter Juhas

use engine one swap spare right? of avoid So avoid existing -- it we before or overhauls that some swaps, put you we've in Well, in and of able of put when engine you areas to our the highlighted engines that are we terms to costs is can in are in, and business an is engine that down obviously, bigger the you that leasing to for of that standpoint engines a And one expenses. engine utilize those key we've that's got drive the things other much a a leasing way benefit the from of I'd purpose. because pool is say having of that -- strategic

Operator

our question take Mora We'll with next America. Perez of from Bank Mariana ] [

Unknown Analyst

actually some you for the and where XX-year airlines ago and assets of, year of engines So us like the average How like there like like I'm what, like rates aircraft ago? trying the going Can rates year a -- global generation particularly old versus a seeing the recovery you unprofitable different then look to talk to are around you capacity, average? these retire to but have type current an how like also witness give again today this on U.S. color versus traffic. what

Aengus Kelly

airlines mind is -- about in Markets it's lot seen on to have continuing Capital the you engine. see point as material last Day, that those across years do XB have engine. much because shop no that an could that then to out where the continues a of few of I increases overhaul we've certainly driver cheaper to board a that is assets said, speaking we've for real the We to million to There's $XX been the are the willing in a paying, You're pay charts [indiscernible]. my be so just on our to over see that increases, they case. The XX-year-old visit what laid and why XX-

the need overhaul that to years, which the not if next years, to need as next have X investment. or well, and years. going to for X be keep probably for engine type XX flying cabin you're the airplane to and XX of another you you aircraft the try recover honest, you And what is If the that

it it's I've the see decade because will So time stay assets. said to -- likely until that's to big to technology way, driver the what new and of I a the as for that on before, me, occur as take ramp-up end that's the and

Unknown Analyst

And aircraft, I just we were slowdown on it's how do to forward, what this, how not about you sell is demand on manage this have you engines? particularly like if I'll the and the extend going you replacement what other strong mostly to mean for say, lease like see versus

Aengus Kelly

and has -- around Well, is must company the average be through an be the be that then sell our would over how XX think to last, we on But public XX what years, always it like average asset? an age years been the we behavior we more see assets. towards we of a nearly it which of that base Do the the XX-year depends on now can out mark, assets I sell is we we'll view asset to inclined you sell.

we get you people we've we And because that's though never created. We to point, sunset Investor are is likely of say of are several shown decline. portfolio the at to age strategy the the look meaningless. some strategy again, So of today at that the of a components why values presentations in our look of to to the those feel as age strong very how values the key you the average Day do leasing even end decade, business. often The It's utterly should is company. a portfolio at average that the of

If bought you fleet you to you happen. And AerCap, in as be discipline in provided on regard if of never flying ordering planes see in aircraft. Investor in And we've and need XXXs you can charts at XXXX, well -- those them a Day. last that's see that XX had young you type because have not won't years, XXXX. been tremendous XXXX, And type, or the those you could over of we will that we that you that money the what XXXs, lose exiting have will the

Unknown Analyst

aircraft from Like I me. were were strong if balance And can like much happen? term. to you your imagine you of one manage sheet? this to you Airlines, one the willing do like like get Spirit And last actually -- environment the how if lever more are opportunity to you orders with new how where see in of the you taking near opportunities it actually have

Aengus Kelly

a have daily concerned capacity the that. look, to plenty not at comes in. try work on very them. been who's to and asset works on pick partner few hit for and about looking It's we different partner for many on our to them AerCap. time where we basis -- long ones right we've but balance any something we a think, acquisition having I'm of do that sheet do ones a for to the basis, advantage a Well, a are opportunity discipline bilateral the of that opportunities We're just customer opportunities. of I managed take with

Operator

to This the call would concludes remarks. for over any back hand like to Kelly I question-and-answer final the session. Aengus

Aengus Kelly

thank you look in for months' on look, call. X to Thank forward We today update all us the an Well, giving you. joining time. you

Operator

conference today's call. conclude This does

disconnect. now may You

AerCap (AER) 1 Aug 242024 Q2 Earnings call transcript