AL - Earnings call transcript Q1 2024

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Operator

Ladies and gentlemen, good afternoon. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Air Lease Corporation First Quarter Earnings Conference Call. [Operator Instructions]

And I would now like to turn the call over to Mr. Investigations. of Head Arnold, Jason Mr. Arnold, you begin. may

Jason Arnold

of our copy Thank Lease Financial today, on webcast Earlier published we our Corporation's Abby, section Jason website Officer today, I'm for Steve and and Chief the our Greg our available Plueger, Call. Vice the release good Air to is Arnold, President and X, Hazy, by today replay our XXXX This Welcome President; everyone. A first joined Chairman; www.airleasecorp.com. First Executive Officer. is John our afternoon, website. available This and you, earnings of results. being Investors will conference Monday, Executive Willis, our at is Quarter be Executive webcast on XXXX, quarter and Earnings call May XXXX Chief and recorded

[Operator delivery in we the This represent questions meaning impact the and only performance. in any the statements as Reform Securities as note this and answers state airline today's that forward-looking Litigation These conference of statements Instructions] certain to begin, engine statements regarding certain the future with operations sales limitation delays within our estimates aircraft Private are of including Before up statements manufacturing flaws, and our to date. projections management's pipeline and current industry, of performance please the our includes future call, Act. of speak

our or to statements Corporation in cause risk to our results of a forward-looking of could or These may detailed filings for events. that Lease SEC assumes update differ new from light that estimates the more expectations. factors Air obligation involve and risks information information refer any affect with future actual materially no Please to uncertainties results. description

return income we may pretax earnings adjusted taxes diluted non-GAAP taxes, share before adjusted measures addition, income and before as equity, adjusted measures. discuss on which in per In net are such financial certain

definition that issued our on Investors these [indiscernible] of corresponding non-GAAP at of can the XX-Q found for release GAAP section to as This measures in A measures as the we well our utilizing today. reasons www.airleasecorp.com. website the and our and and section Press them description both of be and release earnings

recording not conference reminder, is of this unauthorized permitted. a As

over I'll turn Executive Plueger. Chief call the President, to Officer our now John. and John

John Plueger

Jason. our you, and you, today. Thank Good thank for everyone, us afternoon, joining on call

million which sales During versus the higher in diluted of offset $XXX end first the of the expenses, this per approximately more first our with lower detail we operating and of X benefited Greg ALC equipment our to order million book revenue the share. in of earnings adding and quarter, will in and from $XXX activity continued totaling though prior approximately proceeds. revenues generated lease sales XX aircraft be sheet, million shortly. from aircraft quarter $XXX growth sold flight in higher in our balance Results $X.XX purchased We fleet year, and new quarter,

X Passenger in year-over-year strong in to close expand remarks. upon total, at while years, stayed average New came The in average our on which fleet pace, will strong traffic at aircraft at X.X further meanwhile, remains below a fleet rate approximately continuing in Weighted line. utilization weighted term up years. lease XXX%. expectation, exceptionally sales remains at expand while XX% deliveries is our Steve were modestly young remaining to volume his

present, our XXX% of book in our commercial exceptionally robust. At placed forward fuel-efficient with are turn in we orders placed. entire XX% to XXXX, for Demand order aircraft remains

XXXX. our the set likely ongoing XXXX, vast a delays, of through through billion book ] positions few delivery both majority XXXXs, the positions to order given will are delivery strength for very remains $X of Our this key and Airbus [ until added Boeing us, source have extend available while well deliver

with those within of real that and other lessors, frame. time option new needing slots a aircraft the delivery are for small handful airlines only Our

will coming lease we've strengthening the benefit us past, in So periods. in highlighted as rates

extensions. in We're XXXX, to have don't but from existing also scheduled we expirations sizable and aircraft. that have a aircraft and around benefiting the limiting many XXXX, OEM those lease strong in scheduled lease each retain customers other fleet of factors respect delays during to and with operations Similar with XXXX XXXX to we market XX our lease do uptick by years. given availability all both eager expirations new Practically delivery of their airline and are used our our for for

As such, we will lease believe rates on remain strong. extensions

commercial the are XXX ahead, chain anytime remains on constraints. both FA side volume production away going soon. supply not constraints Boeing and aircraft production supply with As view clearly for on new the challenged chain

XXX program the from with not to some are intact. subject that slow time will the as resolvable gaining overcome, ongoing to issues chain meanwhile, challenges. momentum impact a well is chain supply a finally manufacturing impacting production & view Whitney firmly our path same also of and supply to for remains Pratt XXneo challenges constraints here as said take While supply Airbus aircraft family. also the seeing years easily chain ongoing and number and AXXX We've the

above and do we manufacturers that the safety production of focused I are we all on to want the believe ongoing importance emphasize, other that have firmly been by though, challenges OEMs humbled that factors. and the quality that the believe

this year $X.X XXXX to anticipate deliveries mid-range about full the to at at deliveries this -- midpoint At the billion. continue at billion to We range given be delays. billion in the juncture, of approximately we $X.X of $X.X expect range ongoing

respect remainder we deliveries. downside expected in However, could risk, our with further have that to the 'XX particularly of $X.X Boeing the in disclosed XX-Q, billion for CapEx

I of anticipate $X.X is aircraft to of that billion relative around billion worth our new $XX quite the second expectation, want for fleet. highlight still As fact deliveries. expected again 'XX the in quarter we deliveries to sizable volume

what in told to strong the sales activity our we with expect. demand was you first for line continue sales quarter We for and aircraft the roughly

$XXX held for equipment flight million including $XXX remains sale robust Our million sales $X.X and of letters to aircraft pipeline subject at in about of billion, roughly intent.

business outside closing current aircraft of be part model, aircraft second return business. equity owning new returns tends the part of our around in to as control. The on target given based of we of a transactions economic indications, sales close in enhancing based investments, our first profile expect But factors XXXX. we as lumpy only the million aircraft the $XXX is their quarter the harvesting on our critical our well over on would economic is Sales and key of on lives timing to of a X/X gains activity somewhat of

close run long-term the benefit on focused shareholders, our We Lease Air to with I'd quarter-to-quarter reminders. variations. few for of like a not

Our maximize consistently new minimized asset aircraft order risk and book value. model has asset

inception in Air recorded you, me charges not date. Let Lease has since that for remind to any XXXX, our impairment example,

We yield. also take lease do aircraft are The we yields run lease of higher such which at not delivery are we aircraft as impact on yields. typically to sell, our the older versus our business single isolated largest any metrics, new the

is reason expected new give an outlook quarter sales. we our This expenditures why you aircraft and each one aircraft capital expected as to

different extensions have relatively 'XX, airline and transfers to or lease we XXXX operators. few During

on these very lease those So yields our impact overall years. minor for have

a with that new time delivery average an sign of have of order from one we book aircraft airline about aircraft. from an of we before, highlighted our we've lease X when years As until

given X and our year, reflect year deliveries in ago. years that any the fact, So environment existed this

to prospects currently margins expect continue lease current of sales the we will and the result, aircraft pipeline around a gains. conclude, thereafter. remain same At likely ahead. about we remain levels our yield As our remainder To our expect we harvest and XXXX excited for increase net time, healthy

Our order to book significant deliver is demand a fleet aircraft exceptionally strong. time growth all set at when is

as commercial the order into seen business. in future in from our This plays fact, both and the of is we've it existing history this as our returns In aircraft our favor, by book. ever fleet market value tight directly

Steve I'll will offer turn who now Steve? over to comments. some additional the call Hazy,

Steven Udvar-Hazy

you much, Thank John. very

to on the the leasing know, you as beginning. industry closing aircraft of Just very have his since in expand comments, been we most

imbalance actual to our more the So you changing hear is favor during trends pretty it us our a in supply for medium strongly than reality see ever underlying this in be of current for the not and of the do the the given should term, demand. to we careers. But for that and current short striking realistic seen say over is supply-demand long to we've environment,

on imbalances the these are for basic least of at stay very rates fact, likely [indiscernible] future. means super for economics. resolution lease and horizon upward with high In values persistent in and These the us forces for no the are years industry. of aircraft our to to means supply X demand with momentum little X

XXXX [ for and aircraft billion and billion a As through new $XX favorable dynamic. years business the the early ongoing $XX deliver as market about commercial at we're more owners prospects of these scheduled of remaining than this another very positive to with technology ], result of present

Airline fleet globally book. high new traffic our new passenger is fuel-efficient commercial technology, volumes for well with factors remains many markets like demand and as aircraft, in strong both load supplying records for as traffic revenue which those setting our order

recent robust released IATA for last most expansion. double-digit rates. rise to months, solid the Total with major international traffic was up volume at all figures continue continued markets percentage XX% a week to illustrate

a international versus Asia XX% Pacific last hottest overall year. traffic remains market, dramatic at expanding the

international continues routes. as of We well as international markets, to continue momentum and as the remain to to intra-Asia one expect Asia to Asia particularly globally Pacific North build, Europe the to growth Asia the America in strongest in travel

with Europe, expansion. elevated, Atlantic passenger was China is in robust International healthy are Middle of X% even increasing traffic also and Asia a outside showing the markets America, Load traffic new in records. America, remain many achieving and the factors volumes. enjoying North very the North meanwhile, East historical particularly and markets up Domestic Latin strong,

IATA are year this most world's airlines, that profitability load and And with in success. given records. regions outlook higher of it's supply of enjoying Airlines is We continue potentially Lease's significantly to aircraft record Air for average load and factors have margin achievable world, the revenue clearly right good many not important business factors point to low or to airlines actually Times profitability full model growth the suggests new for expect but airline now expand constrained setting performance from that total out been experiencing correlate some XXs. commercial expansion, and the also to range, does the year.

order with and regardless made be the reliability. of with are in lowest the the aircraft revenue Lease market flying achieve the to best generate to route objectives aircraft goals assets we provide Not profitable in by airlines the to for other new aircraft best way order available the airline's required operating network around, expenses an lowest obtain types also achieve to need which dispatch book and these brand fuel and Airlines targets. are a them burn our from typically necessary payments profitability.

point I'd that line airline statement. And rarely expense X largest the is items expense top out their leasing in income within

So point security keeping typically a substantial book diversified up provide highly with From average and management or individual value difficulties. our run fleet the insulation make airline. going significant of any our view, from customer, lease any not an remains payments fleet operating into to on just to of airlines with exposure X% is airline us break risk packages that

new ALC's of delivered one back to in We carrier delivered ITA and Circling AXXX-XXX to aircraft one two results, the and wide-body large airline, of in central XX two as Airways, during a Italy SATA, of ITA based as the to aircraft Asos AXXX in We America. North Netherlands placed X operating national new two a Europe. the as to the XX one AXXXneos growing out six our aircraft aircraft. well to part growing one Southeastern aircraft Transavia quarter, from Portugal order that narrow-body AXXX-XXXneo quarter, Asia-based to and deliveries airline including quarter including one as and period, and first the delivery airline deliveries X to book in AXXX we in with well delivered

] Airlines Aeromexico that aircraft We Milan, delivered placement, to Italian as well central X the XXX-X in with based to of and including as [ Europe part aircraft, and NEOs, one during we as quarter, a aircraft airline to part the XXX-X four of one package, placed XXX-X -X one airline. the to as one XX Malaysia our

AXXX-XXXX following wide-body new wide-body fleet its retirement Atlantic On as rebuild oldest the wide-body Airways with aircraft XXX well Airbus Virgin side, furthering that its capacity one we AXXXs. new of to of the efficient international its as airlines delivered

I advantage extremely well deliver nor early turn Airbus the demand our Our is many in tight, for market main Willis, aircraft over plant very now to for to quarters Boeing ALC in new but neither repeat, supply jet as will Lease the of had financial just to summary, extremely frustration that the our trends, did many XXXX. able deliver short his is late. solid. were The for positioned aircraft aircraft unfortunately, In likely that aircraft in these QX previous future. desirable 'XX. for deliver And take all airline contracted the not that Greg is term, all did delivery were performance were and for of Air in the is of detailed years I the comments on call of late. CFO,

Gregory Willis

you, and afternoon, good Thank Steve, everyone.

sales fleet During of comprised revenues recognized of from of revenues total other growth gains of and million the generated activities. aircraft rental increase $XXX million, sales, our was our XXXX, and trading in was revenues by driven of first from $XX our activities. quarter Air Lease the and approximately which $XXX million The

our was recognized this to substantially lease to the to fact was lower I compared last business. by revenue to noted, as quarter, of year-over-year comparison Similar the impacted prior that our the end $XX million nature revenue end-of-lease quarter of want the John As period. rental revenue in highlight

on based and are an XX%. vary to from million for [ the of representing generated aircraft. of And fluctuate, in million by will tends on conditions. sales sold are sale market gain from while this quarter of Gain it margin totaled up ] the proceeds coming in recurring XX% somewhat our again aircraft our a gains, these average Sales X quarter long-term generated first quarter earnings business. approximately on part meaningful These margin quarter $XX to revenues and to the sale $XXX

robust, sales on $X.X Our and valuations pipeline billion remains aircraft healthy aircraft. containing those

to underscore roughly time moving gains leverage -- enhancing to fleet value in last addition up expenses. was composite cost embedded also liquidity contributor on it attractive our to well rose our and the us million financial a -- In primary a of our over operating year-over-year, X.XX% to for expense our of by relative $XX reduce XX return to in basis business, profile our means driven lines Interest in as the increase expenses to by point take the year. and enhance

capital moderate at largely -- debt rate structure, rate continue to fixed from rates. to benefit significantly current has our of effect with We XX% XX% interest environment fixed being which the helped the our us of

on it. though at out create revolving to I is yield our inversion typically to facility do to want our use the of continues as composite results of reduce to serves present credit of the point that increase curve cost a drag our while fit, serving

curve a was prior normalize We that to expect as Depreciation year's revenue. cost. expense continues declining the that yield of the impact over while relative our time SG&A, the flat to growth having beneficial period to financing our fleet, meanwhile, relative percentage track of a quarter, will on

further from collections, cash our the balances collections, aircraft ability our year, Cash customer and flow continued and benefiting in first prior fleet reduce to fund operations from cash deliveries. approximately expansion airline strong the X% healthy relative the quarter to

financing to on activities. Moving

in several we the maturing market $X a billion. XXXX. rate completed U.S. of European capital ] XXXX. at And we currency which XXX inclusive X.XX%, issuance raised XXX quarter, of million maturing We X.X%, bond million markets totaling cross-currency again, inclusive swaps [ X.XX%, CAD swaps completed in lastly, at in of of the raised In million of in $X.X a at During January, maturing bond is we EUR XXXX. our rate

demonstrate European liquidity. diversity of activities capital and and our market Canadian base sources funding Our debt further diversify of

a bond funding Islamic CAD, recent we've business, excited since market about and offering euro reopen our market breadth diversity. for been and financing significant USD to lessor us transactions, having global particularly first effectively platform our Combining XXXX. euro are the We created our that inaugural

$X.X by We are a also our credit pleased upsize which very our of of story. facility the revolving from funding to recent and extension remains key billion $X.X component billion,

of partners of partners on as like is very unsecured would a support. sheet, and debt-to-equity source our many funding primary rate We remain a and debt comprised focused X.Xx. targeting several strong for the high long-term We a ratio their as maintaining which of this facility, XX banks balance financing, to maintaining ratio of of fixed investment-grade thank utilizing continued well as in amount leverage conservative utilizing a

remains of at end quarter sheet. Our strength the position base at the unencumbered $XX and billion billion $X.X strong a first balance liquidity asset source of of our our is on

is net Our debt-to-equity X.Xx. of basis, GAAP on was ratio sheet which X.Xx the at of the balance the end a first on quarter approximately cash

We continue from help sales to proceeds long-term utilize our target debt-to-equity reach medium to pay us the and debt term. over aircraft down

the positive remain a currently on fleet the for source our remains The operating robust for book future. we up, the key very order of business of outlook strength environment. our and very Wrapping value in

both We expect long-term expansion and also fleet to strong values performance, while contribute ahead. lease to [indiscernible] revenue will continue aircraft continue to rates will our to expansion contribute

I note are Finally, to we renewing do our shelf registration want statement. today,

To being expires be existing over to historical us there's this the continue Jason capital the shelf allow with the tomorrow. isn't session replace And a will made question-and-answer practice, call our with turn to to the I'll -- call. of Consistent that, filing access statement this markets is clear, filing our back for to matter. registration

Jason Arnold

concludes [Operator remarks. line the Instructions] the open commentary Greg. and management's Abby, please Q&A for you, Thank session. This

Operator

[Operator Instructions]

question first And we TD Helane Cowen. will Becker from take our with

Helane Becker

you of Have size the thought any the order given to book? increasing

John Plueger

take one? to want you do Steve, that

Steven Udvar-Hazy

hear nice Yes, Helane, from you. to

future That's and of most quarter most aircraft. over a comprises compared XXXX. have billion first We lessors $XX and of to of XXX now deliveries airlines over the huge order that book between

the And years. particularly I in during favorable think over we when because delivery today we're that next can more could prices good of in survival not those generate tell airplanes. about position that ordering very duplicated concerned XXXX, a be in and place actually end long-term to and I pandemic, were dates placed that X we you So orders than the growth the airlines we're XXXX placed at orders their further

was, the industry orders able we of delivery dates. course, But knew community long Most and shell pricing, we're pandemic. the placed term, that the terms a negotiate effect excellent to when of shocked will the of leasing the at time we strategic of because in recover, and

of do that early play So since this part with late order 'XX that in in we year, been to this time, we large-scale orders. at the on need continuing part frenzy going compelled this of XXXX, point and has not feel the

Helane, be add to the in years, that the In we economics may and anticipate several lessors which have and next their fact, or first to backlog, incremental aircraft if there right. could look delivery opportunities at order are that airlines us alter a give will modify

So I hope that concerns. answers your

Helane Becker

really question noticed again. think Were -- it that the ordered seeing China Yes. Steve. you're growth surprised Comac in in No, Eastern China China for is I Southern that My that's well recent follow-up was mentioned you IATA I the helpful, data. that aircraft? you as

John Plueger

surprise. don't telescope Chinese is we aircraft, such major we right. be, the I had want as what that mean, not That's Chinese-built at actually was be Go have many that in fact, that by all. expectation logical the No, ahead, times John. I ordered Comac, would airlines.

was expected. it totally So

Operator

next Bank. Hillary we question take will Cacanando with And Deutsche our from

Hillary Cacanando

I which think is one? be Are if indices? so, small S&P Lease the there Air recently in included looking -- the other And in to process that to what it into? you're XXX And get index. indices any included was additional

John Plueger

Greg.

Gregory Willis

as be possible. like to we I as many of mean, indices Yes. included course,

of public But U.S. does being However, its a be several company there's there's than on that, any I the very by but included. of don't express verge with as we're interest that have a the S&P in happy eligible included advantages to included, other do one individual whole not domiciled mean, indices. I being now, But the to right for being company more with are can XXX. think lot being an S&P

Hillary Cacanando

Okay.

XXXX, So guess. nothing nothing pipeline for I in the additional,

John Plueger

aware of. we're Not

Hillary Cacanando

in the the and you've in the increase -- in Okay. rates. increase And rates past, between then discussed increase lag interest in the

this that just could should Could kind this or set guess if just faster? to you a is of that the And that -- kind close you Or expect gap that year? I discuss close year? to Do You've is even many of and times. there year? closed how by mentioned this narrower gap get Fed the look that

Gregory Willis

Yes.

it he I think his around prepared be that margins at at. level made that is currently our remarks John would said in the that profit

we in the as of of But as little have that well. rate of function pipeline, mainly the inclusion our a uncertain -- timing of or which and pipeline. bit is the execution that's course, as well with changes interest as by change of delivery Of sales can driven that policy the the timing our in a airplanes

we long probably profitability. [ to expect So from have over term, went but points major circumstances, current we'll ] hard we we level prepared it's little think given clear about macro through a the those of this remarks. that to in visibility, benefit the be the And

Hillary Cacanando

it. Okay. I question. could If Got just one quickly more take

considering Just priority talked and would that share start being down buyback, when know X.Xx. about is your to share to leverage or... you get was paying buybacks, I your you X.X debt, I guess When you

Gregory Willis

Yes, to very back which time, to we'll that target have I leverage ratio all want we think stock capital. And and clearly down of explore options, in buybacks. is excess one point our at get

John Plueger

company and very robust includes levels buyback stock discussion is just allocation me highest the alone. add levels. Capital order to at a Let subject

Operator

from our And with we will Baker question next JPMorgan. take Jamie

Jamie Baker

So similar the we question that week. competitor last had

the for have recent same quarter let's years years, won't you type X first in that stand okay, For X close ago which signed which How aircraft the it. signed, opening to the hit enough? the you presumably do would income statement lease or rates today, those did or comments income impair the just most in call lease hit vintage John's for

Steven Udvar-Hazy

we a XX% latter of part two coming are can a days. Jamie. lease the urinary I signed And what generation aircraft with [indiscernible]. of approximately XXXX follow new to of lease for signed rates intent [ question, identical just aircraft. in Good the to for ] higher you the than line We with documents tell letter Airbus Yes. that XX% in

be that a increase that's significant years to going XX once that's will delivered. enjoy for the aircraft So we the something

assuming those of the quarter of XXXX. deliver will there's hopefully the two new the fourth further and XXXX, no delays, aircraft, One in of second QX will of deliver in aircraft

they to LRF average when begin deliver, our going they'll forward. So impact

So that last days. occurred has that's the the you in recent XX most example can give I

Jamie Baker

Excellent. mind And investors. you like it's resonate don't with really saying I me if examples think that do

So hour are I Greg sales comment. want on this. I it. don't the the quick also though. nuance John beat Mark his increased you contracting, appreciate prepared power know, by that's just there bit really still I to maybe maybe I all. that said horse But touched -- the also or -- the follow-up, I surprised gave. little guess, response appreciate don't is dead know I a A remarks, what in by on the net spread the a just I and contraction, on --

John Plueger

quarter of aircraft today timing point higher a so was of projected rate, fix well look, the you asset years as The lease that margin will when contraction new over there is enjoy me fourth our of the the they over X yields Yes, [ from aircraft, or at we of aircraft quarter-to-quarter. We end be about Because, first the so -- aircraft. of [ -- time. year, out older which the the an quarter timing change little but was as lease Why? ] own tend sell aircraft let to rate these why does at during we of know, time, delivers. our of sales period just aircraft basis when the Well, add, a holding as bit appreciate but there will from the last increasing lease we we we delivered the Jamie, take increase actually XXXX XX that ]

first them when And take lower. a we until bit little they're

they the you margins sort can of So this. at I 'XX quarter-to-quarter that's about outlook stay of and end your understand -- pretty thought you, probably then I we I where best increase But encourage not about it's of analogy. trends. our about going your We've kind told a and are continued looking the through thereafter to are would wouldn't again, positive We're -- give. thinking overall now a

Operator

we Stephen question with from Citigroup. Trent our take next And will

Stephen Trent

The you Europe? refresh things the first is on my if could the trapped with get you from where insurance proceeds potential aircraft in memory stand could Eastern

John Plueger

Steve, want about talk to you do that?

Steven Udvar-Hazy

Yes.

me situations. aircraft let So for works types insurance how the these just explain of

for aircraft markets, The spread is itself, okay? insurance But but these is in Japan There was company carried Western insurance the European. is primarily conduit, them by few in was a many insurance the airline okay? underwriters among airlines broker, ensured Russia So are that Russian many, there a the primary and in the which a U.S.

not airlines Okay. obligations. Then is cover is the for valid its in procures Air do of us coverage Lease which second their there's for some layer insurance, carriers case a meet which entire fleet to reason to going the or

is to an also we're we're has already a layer those our planes government cover pursuing and here some seized this of One all So has arrangement carriers Russian OFAC Russian insurance designated in by two-pronged the our approved aircraft legal in then approved solidify engaged the insurance that been activity. by pursuing happened to a and through which were we're U.S. with of our where additional that we of acquired action And activities. against company,

that on these So report claims. to quarters, and to fronts. progress hard next of hold all actions if taking diligently we'll recover there's to the be work in goes ongoing There's court able very in negotiations, Europe. starting there's hopefully, are some cases And coming all actually well multiple month our

Mark Streeter

I went and of the geographic speaking, a it sequential looks Okay. it still one That's exposure much just kind you're helpful. long-term of Asian some saw a up and just of super in down went placed like and basis, looks And reading markets Am [indiscernible] too thinking appreciate I other Helane's nuance like it. follow-up, into some I That's America your North on for the that. really markets. of of follow-up question. to is short-term a kind in went growth? net up

John Plueger

I'll take that one.

the when one and was into is our percentage were great this part disproportional a disproportional. were before development, had did but no, beginning China -- exposure heavy China of COVID at we was it at company, there they in natural We our leases that very XX%. So just was. point who for a well much we of clear plan little Didn't our country. matter really bit phase any

the into we past our some sheet, [indiscernible] moderated balance now. the used X as China a and is but about more have But so an now about exposure moderated grew item. naturally going renewing X to there, some China have and is of our And leases course over progressively, now back, separately we forward to We taking aircraft it's been X%. bit that it as such insignificant, years China

In time. has been didn't has primary in which been feel we our for us breakout. the placement lease very market So a for Europe, robust long that a warranted meantime, activity

it we've what So than over more the X just been call a evolution natural past of doing X years. nothing to

Steven Udvar-Hazy

John's new see Chinese pace, an But carriers traffic Malaysia Just have release Vietnam. to a airlines have what high in XXXX go lease very and comments, airlines particularly we and appetite that in a that rapid in to national rates. are those have these to flag later this assets. Chinese Asia, at that we destined Southeast like that sold recovering for double-digit aircraft where airlines to to aircraft are have our of is are places in Asia, year in you to that in a Thailand on will recovering are of large deliver that number add don't number institutions that we is And

-- Asian So China. while new a and do Mainland not but Airbus exposure necessarily down, have our Boeing we lot of both into is coming aircraft going markets, China aircraft

John Plueger

Yes.

add to new Korean that first will to will going Korea, XX of be where just delivering Boeing me May start Let we XXX-XXs our Airlines.

Operator

our from take will we Bank And Epstein Ron final of America. with question

Ronald Epstein

Yes.

I now, mean just right say. there's another room there wouldn't valid for big making think seems like I now, third making just was so So company if getting airplanes this airplanes, player late begs of situation. you back on delivered all saying I to demand are mean supply the question. so and these forth. do airplanes kind shortage That things be the should late, it like Steve and

Steven Udvar-Hazy

But engine seats. that same same the same that manufacturers companies avionics, Yes. the and that guys, those supply to pumps, companies have make chain, same hydraulic make companies with Ron, make same the deal galleys the the

So to products, contractors they're the chain Airbus Embraer, demand those will seen on in where yes, faced a an and supply aircraft military you've also that Boeing, also issues wants are but to be certainly someone if aircraft, uptick going only our with we military side aerospace and by commercial build by evaluate same but worldwide. the not generation new faced

Ronald Epstein

that's kind what FAA of But company I'm if So getting I in down at, audits not every monthly it's Steve, like and don't like know FAA is right? basis, is a... on airplane investigations mired guess getting I a seemingly

Steven Udvar-Hazy

But late Airbus really has been is Yes. well. as

at weekend. fact, In I some examples. you was I small just looking this can over give the

I at So said, deliver summer not of XXXX, thought 'XX QX we time went back and I that would deliver. many to that the how aircraft did in of

we supposed And in March, contract in X deliveries months France, now and XX we're will that would thought deliver to actual XX ago Airbus that include, have example, deliver, that have an deliver. had July. I on it deliver place. and we not So lease it Air aircraft took for They AXXX-XXX to did we actually

So QX. it supposed in will was a It plane to deliver was in QX. now deliver that

four airlines the ago, months X were X different in is None outlook. to have QX. delivered. supposed that deliver that them This We of XXXs was to

that AXXXneos. AXXXneos QX. have slipped didn't Same thing in We that deliver QX with into

AXXXs We have that late. were

QX delivered now should will that QX have four XXXs and We QX. deliver have that in in

a Ron. it's FAA phenomenon, an So Boeing It's issue. not industry-wide regulatory

John Plueger

Ron, John. this is

Let in comment. be There delivering could is right your right no say add question most important X other is words airplane away. another The you away. when me one just

it manufacturer So hinting they're week, you're probably at was Embraer and at reported as -- any new doing this like this. something past looking

from But the any new take we're going [indiscernible]. it's mean, and any to scrutiny years, delivery -- aircraft both subject for certification regulatory I aircraft seeing the because new new heightened be of today, will manufacturer Ron, to the

going is at I key even amount of if real all. is some to XXXX fair happens thing. X-year Ron. to a even X- going time. think, to take This is a timescale, not a This beyond it question time, well it's the -- if if So even it That's take

it, to just trying trying it. not So put a on little to reality

you're production or but a time with even commented the if formidable the Steve challenges chain on oversight to is certify just chain and For the new of problem supply plagued develop aircraft, or factors, not current reality takes supply it regulatory time.

Steven Udvar-Hazy

And or investor the it's China some whether thinks future Brazil require or other going about to out super thing, is new or and is product, Ron, very knowledgeable Airbus, to a come from Boeing aircraft that is wealthy this new you're engine. OEMs issues. or and the going Any

economics that improvements engines. any don't have I operating see efficiency will breakthrough in current generation are new aircraft and

a probably the So be XXXX technology you And with engine and such looking John, available first to or when we're power think I at certified beyond. new airframe. do will agree new

Ronald Epstein

Interesting, you gears AXXX been to, guys How the on. to freighter on I launch maybe reaction the more [ question. interesting. are simple And changing a ] then given guess, has

Steven Udvar-Hazy

a Cathay will a XXX strong in been ordered Pacific, couple also there's AXXX in week orders, is of not that which I AXXX I'm, number XXX an Taiwan, been freighters, to cases possible a major There's freighter. number discuss Star I demand. airline and been operator mean, replace KLM placement there's of meeting already of Air cargo this fact, know [indiscernible] a France, by it. Airbus. have of yet announced with transactions in

last both And door door, The issue designed. the width the XXXX Airbus on year in was height cargo that to made of originally that larger terms a is right on a the it's what make comes than that than AXXX us decision larger now gotten door delayed this effect the the on information from and the the cargo airframe. the structure will believe, of we its and fuselage that because on the program be on and based the we've And new of certification flooring Airbus of freighter. configuration the and

Operator

And with to remarks. for turn no call Mr. back I will further this Arnold questions time. the closing at now

Jason Arnold

speaking our the line. assistance quarter. for your Thank Operator, look you, in for forward and please next everyone, disconnect to again We quarter first with thanks you call. participating

Operator

Thank you. And participation. ladies and gentlemen, this concludes today's call, and we your thank you for

now may You disconnect.

Air Lease (AL) 6 May 242024 Q1 Earnings call transcript