Air Lease Corporation Reports Mixed Q3 Results with 4.7% Revenue Growth and Decreased Net Income

Air Lease Corporation (ALC) reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period.

For the third quarter of 2024, ALC generated total revenues of $690.2 million, a 4.7% increase from $659.4 million in Q3 2023. This growth was primarily driven by rental revenue from flight equipment, which rose to $625.2 million from $604.0 million year-over-year. Additionally, revenue from aircraft sales, trading, and other activities increased to $65.0 million, up from $55.3 million in the same period last year. However, net income for the quarter decreased to $104.0 million, or $0.82 per diluted share, down from $132.5 million, or $1.10 per diluted share in Q3 2023. The decline in net income was attributed to higher interest expenses, which rose to $217.5 million from $175.5 million, reflecting an increase in the composite cost of funds to 4.21% from 3.67%.

For the nine months ended September 30, 2024, total revenues reached $2.02 billion, compared to $1.97 billion in the same period of 2023. However, net income for the nine-month period fell to $314.8 million, or $2.50 per diluted share, down from $393.6 million, or $3.25 per diluted share in 2023. The decrease in net income was again primarily due to increased interest expenses, which totaled $615.5 million, up from $526.0 million in the prior year.

ALC's total assets increased to $32.2 billion as of September 30, 2024, from $30.5 billion at the end of 2023. Total liabilities also rose to $24.5 billion, up from $23.3 billion, while total shareholders' equity increased to $7.7 billion from $7.2 billion. The company’s debt financing, net of discounts and issuance costs, was reported at $20.2 billion, compared to $19.2 billion at the end of 2023.

Strategically, ALC continued to expand its fleet, purchasing 20 new aircraft and selling nine, resulting in a total of 485 owned aircraft as of September 30, 2024. The company has commitments to purchase 287 aircraft from Airbus and Boeing, with an estimated total commitment of $18.2 billion for deliveries through 2029. However, ALC anticipates delivery delays due to manufacturing issues and a recent labor strike at Boeing, which has affected the delivery of certain aircraft.

In terms of liquidity, ALC reported available liquidity of $7.5 billion, consisting of unrestricted cash and undrawn balances under its revolving credit facility. The company aims to maintain an investment-grade balance sheet, focusing on unsecured debt as its primary financing method.