AL - Earnings call transcript Q1 2019

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Operator

Good day ladies and gentlemen. And welcome to the Air Lease Corporation First Quarter 2019 Earnings Conference Call. At this time participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] And as a reminder, today's call is being recorded for replay purposes. turn Arnold, over AVP to for your like Jason today, of now the to conference host I'd Finance.

You may begin.

Jason Arnold

in Good Lease Corporation's February A of afternoon by XXXX, will webcast quarter welcome DePalma and to afternoon earnings our replay for all Mary release results At call joined for in And is and our on copy first this am stepping This www.airleasecorp.com. be our Chairman; call John of instructions at afternoon and available and the will Thursday, website. XXXX. Liz This Arnold for the conference on Willis, of Steve I earnings be Greg the and today's call, everyone. on the call XX, and listen-only session. Jason Vice section our At of for Executive website Plueger, President conference webcast is the Officer this mode. XXXX. given participants available our Hazy, our Financial the Chief we first time quarter question-and-answer This Officer. Investors being President; for is our today Air the Chief of published Executive recorded Executive conclusion are

Securities Please of projections expenses, to future estimates that could performance, Reform May estimates we Exchange to operating questions statements certain of items. and Private answers refer Commission meaning and other Act. and stock-based materially operations as performance statements expectations. and for this our cause are from only future the involve limitation, risks revenues, X, uncertainties with These certain Securities filings to This to future and results represent the forward-looking differ statements These as description information events. without assumes forward-looking expense obligation please our any compensation of the actual expense Before light that regarding today or Litigation results income results. our any company's speak new detailed and to Air information that begin, management's conference or note the factors and of your of no more Lease Corporation update in includes, statements in call, a including risk statements future may within XXXX. affect

financial adjusted be per using during equity before pretax In income on we adjusted measures. such adjusted before earnings measures net certain return as addition, income call will taxes, and taxes the are diluted share non-GAAP income

as release in found the release corresponding Our them our measures, and well both this description earnings the of these CEO to of like to for in issued call recording Plueger. and John at found of of our turn reconciliation Unauthorized over conference our section Investors to XX-Q today. Press permitted. reasons I be would www.airleasecorp.com. can not President, measures and utilizing definition website call be This non-GAAP as is GAAP our now can our the and

John Plueger

afternoon Good Lease I'm Jason. for everyone report another and performance. enjoyed joining Thanks, solid of thank at Air happy us. quarter that to you

pre-tax of return per quarter common of net XX.X% a on a pre-tax of recorded first the For margin earnings share equity and we XX.X%. diluted $X.XX,

Our of the portfolio revenues strong up XXXX. consistent. remain over quarter our XX% metrics first were and And

XX.X balance at the end to aircraft with this Our owned XXX quarter. billion grew sheet of

forward to have yet all continues. significant ALC announced. not of visibility global our ALC and with The Airlines including with new The and to to which our operating committed date, XX seven over XX of healthy placements signed continue we've bodies. To XX include rentals. revenue, in continues see lease into covering demand wide customers Airlines six We aircraft trends in been billion strength reach total business aircraft, business. XX have

overall Steve will trend air by over yesterday other passenger moment. Although The holiday timing and March to persisting healthy continue six global factors in reported slower two foresee at demand data roughly traffic last impacted growth and travel times the GDP. IATA months that remained modestly a the we in discuss

third aircraft. first to book two II, Capital delivery the $X which at the given six Boeing. order the quarter, of party lower sales of while During of was in largest aircraft representing we took to Blackbird Airbus Three Thunderbolt of from one one buyers. aircraft quarters to new than went II totaled sold Deliveries and and anticipated XX deliveries and our million history our delays billion, XXX both

few minutes the and a grounding. Let Boeing me first, Max this, talking spend about

We fleet. fleet across delivered our spread globally of relatively current airline portion have XX XXX delivered our in small aircraft Max's six lessees. They're

the Before World nor the scheduled and the and deliveries Max Sitting for two supposed lifted, to customer recommence. intensely aircraft are XX QX. the when Authorities will the to achieved. air and of we here is that end and confidence. today total of were believe will those XXXX not to do speculate the when by what the with Aviation take we FAA more And safely by Max know closely what we and looking we not that's working grounding be on to restore will Boeing, grounding will are be the were end of deliver

temporary on we do generally Our increased closely has in a cessation Max lift, can. deliveries caused XXX, surge The out demand current and including these that we're badly single extending airline the on this particularly XXXs. leases cover customers of demand need working secession aircraft fact Max to lease rates, with and alternative in where situation has

most at from not priority helping this and gratifying is ALC, hey, we and really helped airline customers this opened our focus when on first that situation. main or particular in rate our and our us out was, lease the we remember doors When we guys in you premiums received situation. customers common airline However, comment our here

Steve fact airline that. ALC leasing industry. congratulations some I in vital we buffers and and starting will as ever and facilitators the for play Neither a global So if forget nor on let's get business We the done. community see role

us end of provided the at by based updated plan XXXX. Turning to XXXX on Airbus, we delivery Airbus our aircraft schedule to

seen have delays that from schedule. further We

In were of did as not make fact into the originally QX aircraft Airbus six aircrafts. eight that it scheduled

know program delays. recovery in to progress, that is delays industrial are issues. Airbus delivery the schedules from to engine the related These just we manufacturer now longer While are further no subject Airbus

As has long-term production times and chain and the very in real take the that we to about production that concerned Airbus we've integrity, will but schedule remain face supply said many time industrial We will leadership single-aisle for constraints believe do increases. plan under benefit rate stability new recovery a overhaul viable of complete.

delays with delay. are the delays delivery impact We're for shift revenues in delays to place. mind just The such, the OEMs keep customers. part, further And leases with from As the It's they in will our of It's to adjustments that and our fact the very on likely long-term big working question the from out a schedule Airbus our believe and simply minimize these here. closely we continued Airbus see planned, is delivery most still previously in through we timing important picture begin. horizon the a than when in of XXXX.

delays investments full estimate approximately adjusted billion. With from to our X.X Boeing aircraft from have Airbus, and we both X.X billion year for XXXX these overall delivery

billion our our last case over could the increase obvious planned some Max growth will year of later than from updated CapEx XX% timing year. lower of XXXX, still of shift in Of are further receive represents course, current which the of added schedules Max deliveries be of and billion aircraft delivery Airbus in investments to if said, major service as aircraft the data, revised from X.X X.X the estimate we these them. beyond originally X.X for of upon reduce is our providing revised billion while will strong thereby there return delays a our even the as estimate depending And estimates. That a platform,

year, aircraft So down, with for we'll resume. that when depending delay program deliveries our Max somewhat mind likely primarily or upon in sales reduce the slow

see We continue from many continue. them that good demand buyers to attached to to profitable for aircraft our with we foresee leases and demand

out a airline Let global airline health me and turn bankruptcies.

the pleased to to security on. during did I lease said in in To Avianca carrier In are landscape. as with again. year. major we material reserves air placements placements. seven on we've elsewhere already WOW the follow we with well or in filing, of cover those insolvency Brazil for the simply the in headlines are Airways four aircraft At no in ALC trade robust the marketplace in demand WOWs India. before and larger ALC Airbus placed airline are job WOW, which had lease of an done wealth strong we've date, we've two, last was had waiting such from of these the virtually no rates point place what single impact in aircraft ongoing ALC. of aircraft As I and for signature another you sees bankruptcies and to with disputes want quickly year. now is I've deposits We were had the lease recent the the since The of told aircraft placement. some airline assessing only a just good echo for time owed amounts Jet advance acted risk achieve trade and exposure It's to placed Iceland. have We I filing, every which the we overall happen one have failures pretty exceeded By moving disputes. want cash think more placed There feature we the in and which summary, aircraft on past and to leading

large and With Executive we've and fact, a successful conclude, to to our and aircraft and highly We in Steve? of the over We growth which fair of specifically remain course, business. turn global And and on continues will In Chairman, date. agreements the Hazy color. now on profitability me open in remained Steve hope To strong matters, remain these watchful trade. consistent his new XX with airline provide ALC a results. confident announced the lease team vigilant this bullish deliver that, for execute week, continued of let future our commentary call resolution our in signed at on interest be to the future. strong and China,

Steve Hazy

very Thank you John. much,

We are quarter XXXX with so first pleased results. our

year-to-date global the air next several of over and from over operation remains global being holiday. to continued remains modestly John substantial slowed day of sustaining of IATA were see favorable creates replace but as over just this with for timing demand the over demand reported backdrop, March, demand. is the and travel our growth and not modern of remainder expand And our demand IATA operating new to Easter preferred high day We pace manifesting a to both healthy We forecasting our due the growth the air rapid RPK class the X% of up with further to the trends of the strong is risk confirmed travel with strong airline prices. business aircraft these as look years, and their twin XX of driving aircraft a of XX.X%. the customers picking book. overall. environment, by middle macro factors single-aisle planes over trends the mode demand next still the placement The On year. company the global GDP rising primarily with aging We year fuel for in XXXX believe transportation. growth need load healthy well, RPKs same X.X% picture in to Traffic robust. mentioned, on the focused at order just travel last aircraft and global period pace continues years up demand beyond, as very growth health our continuing

leases airline fund years, to periods. to As of from billion XX Lease's continues Aircraft a only about that in visibility to planning book with Boeing clearly these needs seeing the out some XXXX Airbus industry's to capital of long-term have forward of desire of remind substantial billion this to out committed everyone XX quarter customers for cases needs to billion in and XXXX. in Air ahead. significant represents order are the and $XX like the expanding their longer even years with I'd result, only certainty the total we're and between for $XXX total aircraft our into demand and revenue lock we XX longer deliveries future industry finance than for strong X% more needed fleet ALC illustrating rentals. again see

competitive meaningful market. operators advantages order new mainly leaseback on Our model to focuses focused sale compared as on

to OEMs, alternatives us purchase on in affords continue a make terms, compared business in-demand to attractive very selective earlier business, and approach want of which determining the the see also We this to as available to customers key we as differentiator our than access airline do providing from to airlines directly available to aircraft for with. many ability us

larger no earlier, avoided to airlines air. to John exposure As recent credit failed we WOW highlighted from of losses the that exposure two our and experienced

think credit well to reiterate losses, in managing world and fact and world sizes risk, expertise I all our fleet as and most optimize route to at highly to address needs helping over and any We airline customers approach XXXX. structures. of have planning it's around a as important the the fleet of to expand their have we failed airlines diligence very testament the since experienced focused team. of effectively as on our modernize the remain all that XXX their our they And not regions ALC,

AXXXneo longtime important deliveries a dozen placements transactions, about customers. largest which are Asia. ahead. There airline weeks lease In hear in unannounced we you'll New with long-term and also aircraft deliveries months, past more of completed new lease to the announced and During first the XXX-Xs we of both than number a AXXXneos on Airlines, half airline We announced in several April Zealand. the Air the of to five of Southern China delivery and

XXX-X We of announced aircraft an also three lease in airline Korea. placement with

several of of Air aircraft Arabia, LR and AXXX including region. East delivery order first the LR six first of AXXXneo Middle We also the an new to our announced delivery the the our first from in LR book additional deliveries

the new is we've beyond. Air our for for in sincerely outstanding business. achieved and could far the very our to exceptional want this report $XX attaining last with first turn the continued expect the and of We and work $XX Lease that like highlight is exceed And not The to provide milestone in to financing reflecting assets an total in create two for aircraft in the time. Air first billion aircraft, founded Mauritius, sizable of to AXXX-XXXneo Air airline a Greg to we've knowledge Africa. continued of only noteworthy assets growth that recognizing and vision update We into of among announced days. CFO, what the what the to I'd in Willis be balance experience over this went thus and and next lessors. bold consistent that how delivery over look delivered that's achievement of of sheet to coming our I'm in of to for type combined spring we far that strength a the also and the XXXX. AXXXneo no relatively Air activities number, XXXX, proud of I'm their to with growing Corporation's I ALC addition best team is aircraft our I come to forward will proud operating Lease dedication thank of financial our on a billion in This amount but short quarter a Corporation's but industry the that, of Lease item call performance, first which our all

Greg Willis

you, Steve Thank good and afternoon.

we of quarter of from the recorded benefited earlier, fleet net our million remaining includes our metrics XX% approximately growth relatively key The all quarter generated performance. highlighted of up yield, total and other term portfolio year-over-year, another of As which of lease XXXX, trading million, aircraft XX In financial solid remaining first and of average with results age XXX activities. the revenues ALC stable. sales,

noted, of of and $X included new purchase $XXX billion approximately of representing aircraft investments activity our As sales John aircraft, XX proceeds the fleet approximately million.

in fleet. expense balances, our growth the interest year-over-year, which debt average to our the rise expenses, primarily in to tracks Turning increased due

rose relative quarter is basis rate funding the four and basis XX fourth in points compared prior composite to as up Our modest only points with year.

interest Our our our to represented debt our serve a adjusters which lease XX% and rate borrowings of continue portfolio fixed with interest rising on to rates. along rate placements, as buffer

are lower detail grade more helped in a industry investment basis. will and access benefit We I have which costs, the ratings, our our later. which credit financing to to They increase from cover our in the highest standalone also on capital

to to due with was next growth Moving costs on depreciation this transactional WOW quarter. to we fleet. continues expect return a to associated of SG&A quarter primarily SG&A level normalized elevated our attract and the

XXXX to billion to fleet $X.X Looking approximately representing remainder XX add in aircraft forward the investments. we our expect to aircraft

As Airbus grounding temporary Boeing John and highlighted outlook product delays continued remarks, tempering his at deliveries this in of we for Max. XXX for XXXX a our the are conservatively of future a as

of As expect are a aircraft which billion noting record QX, we and is growth. worth for still we any include Max aircraft. today, investments delays not of does year that these aircraft X.X Despite it for anticipating deliveries

discussed we evaluate selling in $X continue fleet opportunities anticipate aircraft As to and sales last our XXXX. of still quarter, billion in approximately

these expected of aircraft in sales the majority half year. place second we to However, take the of

as diversified of us in globally the a uncovered our a major management aiding to to institutions. was business. significant in funding differentiator. in low the base Turning to amendment points publicly XX% financing, $X.X X.XX and revolving an it on percentage we to largest this facility we increase representing billion. Group step X.X key our credit remains lowest a Through as XX our closing available price achievement facility. due of evolution assets a in of facility increase of And Banking the leverage at makes part announced and we billion financial size This to and today the by industry. LIBOR forward liquidity our priced This this of the which grow the amendment by continued represents credit backed plus the facility serves This continue data based profile,

in March of of long-term our as priced perpetual alternatives. compared This We non-cumulative a also X.XX%. callable attractively XXX stock other preferred years at and debt financing to in yield million inaugural security issuance is is completed five preferred early raising equity

appealing new provides. also of diversity the treatment this agencies capital appreciate We added applied view equity source rating the by funding and as that the

Our delays. debt our ratio our times of long-term issuance X.X is delivery the equity aircraft and below preferred to declined target, times to largely quarter-to-quarter product which X.X continued

a This we this will is as on return our to equity timing we And the debt regularly that and expect equity in financing and debt debt it fixed and investments target and strategies sales. the financing to above now and company We results XXXX. the below of activities of remain to the a of not based committed I reminder, target debt. to will our our and We to my rate level unsecured XX% review XX% Jason. back later fluctuate ratio concludes aircraft cap turn

Jason Arnold

you, remarks. Thank management's Greg. concludes This

open I'll turn line to Q&A the Sonya to call the to So up back over the session.

Sonya?

Operator

Thank Orenbuch [Operator first from Moshe Instructions] Suisse. Our Credit of you. question comes

is line Your now open.

Moshe Orenbuch

less terms Great. congratulations of possibly you billion how both. mean, I in neighborhood do the about of of pushed sales. intermediate you three of the into just deliveries these schedules delivery I they dollars $XX of But we quarters reaching I that milestone. - think flesh get should that this kind in you're about - XXXX? it kind offset less could billion talking in think - on Thanks terms by of maybe more slightly you of Obviously, was in hoping the are changes in year, that and out term. about over mean, that a think the

John Plueger

Thanks, Thanks. Moshe.

has further got has deliveries by have estimates as is we delayed look you that I in best provided of 'XX. 'XX 'XX had, during spilled early remark happened slippage. over the end it, the some showed of we when Airbus that is indicated What at my part into and So

into delivery scheduled this we So year are. of delays to spill XXXX. average end that say will some the towards have year aircrafts what that It's hard were the likely will for over this

Max, will Airbus. it recommence updated We deliveries And look, again, us. be we just upon when resumed, may the be schedules won't are dependent those getting deliveries on speculate when customer from those for but

speculate. really hard it's So to

the than message I think for or of end at we thought But further we're a I end very if still would us. further we think forecasting these many be reasons. the of a year take for growth healthy we're have it's pretty our us. today. - we look, lower as last big even the for slippage don't aircraft year And still is, as big by It's growth

Steve Hazy

a Yeah, one one XXX-X, we're aircraft, on wide body AXXX more actually delivery for an and example, comment month. aircraft accelerating uncertain

time. delays So pulling to as actually And the those aircraft. are on were of I of AXXXs and two the said, offset XXXs all some forward the on single-aisle

our But will So could we're of change. along making deliveries the of slip as overall length XXXX. the into not of adjustments some those late leases economics way. the XXXX and John the transactions But said,

Greg Willis

the see to is balance just in one And well. guided I Moshe, thing to the Hey, the And in continue CapEx call to will you'll to add deliveries, for I think, continue billion in remarks, us quarter. to next think other of continue to update X.X my with that going x quarter as timing evolve. to we us next sales

John Plueger

And include quarter any X.X does for the Max's. not billion this

obviously deliveries the the toward to that for end the quarter change reason if So the would Max any where begin equation. of

Moshe Orenbuch

for planes that level subject a the to had there that skimming was point? that have orders detail. that you, get something you've are X, of to there I entire Is been that as but of delayed was XX-Q, does May chance read cancellation. didn't Got the was said a none It at thanks of some that in for comment today that just those change -

Steve Hazy

the provisions share date delivery months our right with lessees. from the Typically, original manufacturers some that the in with at we the after cases, of and be it XX delay different, typically agreements contractual and may our out have

from. So disclosure that comes where that's

John Plueger

the Exactly contractually committed customers. to on with our whatever to thing Moshe, OEMs, we that we're pass same

the hook. on not they're So hook if we're on not

Moshe Orenbuch

thanks difficult transparency. to Alright, manage but a describe, the for know Got and very both thanks I to it's you. much.

Steve Hazy

Thanks Moshe.

John Plueger

We're it. staying on top of

Operator

Michael of question next our Deutsche And from you. Bank. Linenberg Thank comes

now is line open. Your

John Plueger

Mike?

Michael Linenberg

the is hook, maybe hook talked not want Yeah. question. slightly then about Hey, want on hook. I separate on - the John, back to not to just not different if sorry. you or a I this that the line to on go just they're they're yeah, we're if

today, their making if so even have right, that Max have remain the airplanes you even to For to grounded lessees current are those airplanes ground. on payments the leases they're monthly they on if they're still

John Plueger

Yeah, yes, hell water speaking, all Max to have leases relative payments or they're of our generally or continue. high leases a and Airbus, to

also a have to comment. had your earlier we few comment would - I Now,

have a We few airline Airbus did in had XX have took delayed airplanes those we and that well. aircraft beyond our need airplanes customers case, each actually therefore as and those But months.

keep mind another. thing, So very but much one contractual is are in provisions what our airline so customers need

So we airlines beyond we chosen ability do the out have can opt point we to in But the and that the customers those as not have months. so ability not so. do had had past therefore two to have to airline chosen XX have

Michael Linenberg

their own? something. day, everybody until fact Is likely showed somebody sometime and on those the take in them? conversations the I trying to have is and with from to road. with are And know lessee back we're respect realize of of you the conjunction the that that okay, happen negotiation you in with Or airplanes because something on compensation the so work with ahead at is the I see that getting to in airline end is that where probably lessee then where the little not down wants see the to ourselves do think I to that or do makes have a those mitigate to place I OEM, they they work Airbus? onus air sense. But Or the them? Boeing bit

John Plueger

with all to as point all the been Boeing. we've just you until Jason, know, comment. say we're the it's your all of a for transparent our it's To time. Max at Boeing in and can bit of successful very we can this return to say hoping point, customer then, I matters. We've all with premature very transparent skies just premature That's a been really with is

Michael Linenberg

Thanks, Okay, great. very good, Thanks. John. all right,

John Plueger

Mike. Thanks

Operator

our you. question from Valentine Point. And Scott Compass Thank of next comes

Your line is open. now

Scott Valentine

very thanks much. Great,

made was opting about any market they body Max a wide XXX the a body it to having I maybe think the to secondary maybe Just shift you wide are for impact regard market, a seeing obviously, with if airlines go two the comment demand to to demand, in can't? positive but secondary

John Plueger

We operate they Max have couple of seen where body a wide on markets utilized aircraft previously airlines aircraft.

was AXXX-XXXs airline in single-aisle I running high that the Pacific there's levels of example, airlines on are down but was flying pretty density, and their higher most substituted some aircraft flights, South Max's of just For and at an utilization. they their

I would cushion So it able smaller substitute there's not for say on. to basis on of bodies a wide is but selected lot aircraft, going to single-aisle a be

Scott Valentine

assessment? Okay, airline Is price, fuel increased bit, a that seems a fair terms of oil stimulates of thanks. demand maybe where on up then or doesn't but just aircraft, operations. for sweet And new spot demand little in really impact prices it have just it's like a aircraft for new creates much too negative a

John Plueger

don't planes, I new see planes a range see generation kind in generation of on NGs, the AXXXceos band were AXXX, older out on we're coexist of favor. impact of that without values sort do the of a with XXX of we we're prices the right degradation sort aircraft any major new way, of fuel think either we nor in Yeah, now, being current the where

Scott Valentine

All right, thanks much. very

John Plueger

You're welcome.

Operator

question from Thank you. Baker And our next JPMorgan. comes Jamie of

line Your now is open.

Jamie Baker

Good afternoon, up of one John's prepared remarks. to gentlemen. Follow

way equilibrium affected, does mark concern pace aircraft that far it aircraft as of the and potentially disrupt so the between at being the this? caused the cycle? economic for elevated failures that bankruptcies just appear with we're in Do demand. catalyst? agree this Or failures not is does the that shared nearing indicate particular any you the regular and by driven end supply that Are any way the So are to they are types airline of me of business

John Plueger

if seem is, is well, one if these been look we've you things, look situations years. at Jamie, truth situations, would But one few of expect. in it the had these have a you I each more than for these at does agree perception case evolving each

Let's look at while. for in a Airways India Jet

round in we point else going coincidence from anybody it see more macro call think ones any follow a else picture service - are further and perspective, this or you're fundamental rash evolving to or models precipitate the I these side Look, who ULCC. you would which fundamental time. than a airline big I f largely and other I the see on you any full more solvency. that at causes, are more is don't know don't really of anything timing happening that than the either the business airlines

in So niche. if the where and of or identify kind airlines they are to in need are going stuck they're that niche have special stay middle really a

that not. stay will some airlines airlines in niche Some will

I macro going goes, I or see precipitate we economic more how it We'll see to but global airline points failure see I fundamental just anything trends like think really multiple towards we're simply not. there's that say matters of think no, that. no continue. rates But So that this large or any greater than don't would

Steve Hazy

and rapidly. airlines absorbed cases very, was failures Berlin, Jamie the planes look Air That we aircraft of found homes Monarch, were re-leased Avianca at very for Brazil those and displaced you when one quickly. they Jet, in the very Air if were quickly. even aircraft every at WOW And cases Berlin body of Germania, other and look wide re-distributed very one and the AXXXs to very were air of the involved carefully every those

that the of up believe quickly, of of these the industry we absorbs by So the airline the growth aircrafts that freed very are sort actually resilience the failures. and industry

John Plueger

leasing the being example. we an comment - a just community buffer give let we you my and to are on me So

fact the he knew He's great We those Jet matter had ended. fleet it Jet ended Airways a empire, the in of a it a lot really in Let's rash. XXX-XXXs. The nothing where of founder look that And at to quite leased. guy. We India. is lovable of most And was but a well built Airways. were

So guess for being leased what, now and over the grounding situation. help, XXX-XXXs XX mitigate are Max fact, held migrating in to

right ironic have these is. problems So very, having be have leasing reservoir. a an critical to sense, the coincidence, help on the you you the a Max But nevertheless, in coincidentally very may aircraft of shortfalls certainly it lift. community the now pool It available

problems doing, but for lack they're for of to sure, can't of with sure, to are I So single be a what going for not plug migrating all deliveries. of number there, every Max those associated lessor a XXXXXXs speak them

Jamie Baker

that. appreciate We

as all rather initially since question on what this than later situation Second question this exposure. ultimately obviously but programs residual sooner agreement make would XXX asking air have this on a your end Could the of XXX recertified, cycle the up obviously in might plane just that have at assumptions leases of issue duration to the the value view overall And and that that program? the you replacement Boeing? made. is does life we're an driving portend whatever the I'm overall impact you may for for Max

John Plueger

The short premature. because answer, Jamie it's is no

Jamie Baker

I love short answers.

John Plueger

short premature but give winded I answer it's answer, the is no. you a But could long and

Jamie Baker

I'll leave Take gentlemen. it care. there. Thank you,

John Plueger

. Jaime. Thanks,

Operator

comes our Helane you. from next Cowen. question Thank Becker And of

line is Your now open.

Conor Cunningham

Hey guys, Cunningham it's Conor in How for you? Helane. actually are

John Plueger

Good to see you Conor.

Conor Cunningham

larger strategy? and your Like change given stay Neo So given issues long-term have it just would Max you investment delays, to beneficial just on any the thought the to to opportunities that be the of ongoing there, may or and make orders navigate Lease being kind delivery mishaps take to like and like advantage unique arise? of Air able some for around smaller ones

John Plueger

ordered of still subject get we to But 'XX, CapEx did if we fact, even delays even and in XXXX we quantity aircraft, just have in In the that. been the we doing used aircraft pricing additional in to marketplace nearly not cover any the delays. we're delivery Well, purchase timing would that in some fact get. we we no, these less and answer is

overall has whatsoever model. to and have this intend our we impact business So absolutely change no

in we point value so believe our allocation. gains. sell that that continue remain of do to believe we're the the we model our we new go picture the to us, way that will achieve when you And and aircraft, remains And long main we residual capital see the to able term bigger forward, I'll to focus its for resilience. the Going aircraft

Steve Hazy

almost and on I and and change of own Boeing, we these these needs of that is into needs somehow think on enter from the casting Airbus that's new customers, group monthly there's circumstances. truth multi-year our we a fine misconception of basis, and meet and evolve to agreements Street, to and and the our contracts weekly meet tune modify update that concrete orders The a a Wall that Air forever. airplanes when Lease

cannot So to as concrete look We're ability that amended. of be purchase our continually agreements please fine optimize evolving, customers' set don't sort to meet of of at a these things some the tuning changing, kind these needs.

John Plueger

So that. Steve aircraft mitigate gave wide on are help an we're example earlier when body to fact on time, are that of trying accelerate some to that just forward

just example. that's one So

if a than it's year or X.X from again, we or year, any X.X the X.X, lot prior did scheme we go billion of X.X thing X.X a heck this the So year. to big last still in more

in the confident we're So picture pretty here. ongoing large

Steve Hazy

change into we are own customers. And aircraft, We convert we aircraft. and updating aircraft go suits portfolio aircraft we're single-aisle it requirements the our body composition best convert also other so and wide modifying wide We the single-aisle way, delivery into continually those regularly our dates. that body

Conor Cunningham

doing appreciate selling a And given in Appreciate into that I be then demand planes? and it. you Thanks on why order time. aircraft the the growth just you're for of isn't that book type in sales. proceed detail slowing more the actually elevated you the future? prefer should this I lot so sales guys you're the why But environment guidance. relying used for just on your like of understand

Greg Willis

that is the candidate, aircraft just point just don't that to Yeah, many are sales have we right. that

over fleet age of great the actually mean, more exiting we period. rentals comes we think deal our I airplanes. to the though I aircraft. the low stay have under by profits So be when four, pipeline that these a our selective us gives coming age sell earn harvesting and will it no our quite that average With even we And ability to growth whole

to it's to But sell I shareholders. flexibility So for maximize fact have so. sure we we to are when going I make do to the value lot important comments as now do a and we think continue point our earlier - that more that we John's think

John Plueger

our results. very profitable And looking financial we're sales as they're leases aircraft the well. optimize to always Look, as the lever, but

So a lever and it's for a to good dynamic it's us good have.

that I remarks. I is key - for the in comment forecast think we demand my continue this to think I

that cetera, continue a to on, And et come see that we buyers just buy don't we of in these continuing us to so lot cetera. change aircraft. a see to have et demand environment, We

Conor Cunningham

Thanks again.

John Plueger

$XXX more million worth So used of last sold year we aircraft. than

we result will selecting are airplanes profitable from candidates our those focused selling on sale So and of a very versus yield keeping fleet that good them. for are good

Operator

Sachs. Catherine Thank Goldman of you. comes from question next our And O'Brien

Your line now is open.

Catherine O'Brien

time. thanks the for Good gentlemen, afternoon

been lion's fleet? last up buyers, question, shift a six Is last it's other there you're who demand Like of there category driving leasing for the months? share So follow maybe to companies? selling that any current XX quick any has aircraft in to your over the these between to of one

John Plueger

you been if and structured clear, the majority think I the innovated, put before into the no, II, Thunderbolt of I, products me Catherine, No, it sales let back I Capital thing Blackbird Thunderbolt that we've look largest our that's have actually that.

all well manage because continues ongoing change like no avenue we've retained - to that important points third retained and contact we from the those so like as party pursue for the of well, as selling We We really then and us extremely real TBolts we've fees. So be the management importantly, customer Blackbirds to that the platforms. those that's platform. continue as assets managed sales, largest aircraft we single buyers

Catherine O'Brien

hadn't any Great. on case about optimism the Does seeing entrant you coming Thanks. and be then new out that that outlooks the And to growth large the you carriers existing last leftward rates where in space today any seen the might quarter, sale-leaseback then noted term? medium changes call of continue that China. sale-leaseback any you be to headed give you are over

John Plueger

business sale-leaseback in not into - the additional the entrants Chinese We we our side. do not continue see to or marketplace in

part tempered, that's new finance is tempered. we a who it believe it pretty think investors The the still see it I sale-leaseback looks a way, still investor other environment to a much although But I appetite entrance been rates has good for rates do do think so wish is, low, lease continue The I are seeing airlines been I - lesssors seen by bit very have to that gotten market continue it's tempering but a well in we as for and low. and is in cases that community some temping tempered product. I and the think of the little sale-leaseback. enthusiasm the think

Greg Willis

underlying purchase two thing is the to rate one lease part a point It's rental well price. the hearing is out the equation, factors I as want And right. that you're as

difficult are driving but factor, that lease variables, what's So two both lower. know those drive variables rate that it's those little to actually a

Catherine O'Brien

the it we be would it'd say sense. bottom Lease the market something think Totally that do makes Air could this seeing be term that be But over to you in fair maybe explore? here medium could and

Steve Hazy

think so. Yes, we

John Plueger

the Yeah, think in going the direction. trends we least now northern three the are in

Catherine O'Brien

much Thank you time. very for the

John Plueger

Sure.

Operator

question Thank Stanley. you. comes Rajeev [Operator next Instructions] of Lalwani Morgan from Our

now Your line open. is

Rajeev Lalwani

good Hi, afternoon.

John Plueger

Hi, Rajeev.

Rajeev Lalwani

process grounding First question tensions, the politics you that issues, the drag of how on involved? global essentially of and But IE out there. the sort are or some things that to uniform Max lots certified, lifting concerned trade maybe for uncertainty John, Steve, of obviously of can terms getting global maybe in like lead not getting

John Plueger

and believe this safety and authorities country's to I I think is either IE, I global don't regulatory you an part actually and think I think other so. try associate this equation. but do make a - I most a backdoor don't Look, would way think like safety may the in trade this and of or think

the I think I would agencies; and regulatory ASA the and the major say FAA others.

they maybe think mandate or concern, but don't sort a - of you that that safety And I Wall insulated. it's take Street their for they're think make well sort common of quite And I so. for I pretty that leap seriously. think can

are agencies dedicated safety. I think primary mission our of regulatory to pretty their

Rajeev Lalwani

normalizes on cetera. open debt in et it your equity investment an up sheet more into numbers as Just to opportunities, about Can move and balance around? more for your earlier. the of aggressive to Greg, does get where you trying maybe to actually opportunity Does that And, terms to tapping of your terms you Okay. us some preferred understand you in that made of the what and terms comments market bit question fits overall in ability a CapEx? a the commitments market tell of

Greg Willis

think with S&P a us equity sure, financial XX% flexibility. of XX% from and from Yeah, it Fitch. comes I It provides with credit lot

priced, very it it's XX our attractively year relative costs. look you think financing if to I at

very was So I positive. think that

another a we it of And frankly, or buy that has I opens lot flexibility think sell extra for up of when think when cushion source we capital. rating I agency is having aircraft. more that

Rajeev Lalwani

Okay, it Thank I'll there. leave you.

Greg Willis

you. Thank

Operator

Point. Thank follow we do have up you. a Valentine of Compass Scott And question

open. now is line Your

Scott Valentine

taking for up. Thanks follow my

now higher? a Just Steve lease quarters from now that ago? trend couple moving that where mentioned or is was Is you the changed believe you it factors rate materially

Steve Hazy

I sort out. No, the are of there very the types of is But aircraft. bottom saw of in between after saw low kind because different I point we fourth things the of year last hit season general think think this rates quarter differences And lease their 'XX. summer

signs general. of demand this that year elevation that types. rates for the we what and in so and And is 'XX. some actually seeing saw there's rates in sale-leaseback not robust also think on aircraft seeing is strong we're certain we aircraft XXXX so shortages positive I of seeing are of irrational We're lease

Scott Valentine

very Thanks much. alright. Okay,

Steve Hazy

You're welcome.

Operator

call I like turn for Arnold the over any remark. would closing now And Jason to to does back conclude this you. Thank question-answer-session. our

Jason Arnold

the And next we look call, the us you after out you the you. disconnect much please today. all further quarter. you, for again you join Operator, questions. hesitate if taking everyone very Thank Otherwise don't time answer any speaking to forward to thank to Thank reach want our Sonia. call Please line. to

Operator

for Ladies today's and program. This concludes you in gentlemen, participating conference. today's thank

all day. You may disconnect. a have Everyone, great

Air Lease (AL) 9 May 192019 Q1 Earnings call transcript