Robert Wall
LONDON--The head of AerCap Holdings NV (AER), the world's
largest independent aircraft leasing company, said Monday that
demand for airliners in Europe has been particularly strong in
recent months amid continued global appetite for rented jets.
Chief Executive Aengus Kelly said the combined European, north
African and Middle East market has been the most buoyant in the
past six months. Large growth opportunities exist particularly in
eastern Europe which is still a developing market, he said in an
interview.
Mr. Kelly said demand in the U.S., where airlines have enjoyed
record profits, also remains strong. So too in China where an
economic slowdown hasn't dented airline appetite to lease planes,
with many carriers making long-term plans into next decade.
AerCap on Monday reported first quarter net income of $311.5
million, up from $54.7 million in the year earlier period, year
largely reflecting the purchase of International Lease Finance
Corp. from American International Group Inc. (AIG). AerCap said it
stuck to its plan to reduce its debt-to-equity ratio after the
acquisition to three-to-one by the end of the current fiscal year
in a bid to restore its investment grade credit rating.
Mr. Kelly said the debt target could be met early, though a $250
million share repurchase commitment could push it to the end of the
year. The debt ratio stood at 3.2:1 at the end of the first
quarter.
In a sign of sustained demand for leased planes, the leasing
company's Chief Financial Officer Keith Helming said during a call
with analysts that AerCap has placed most of its airplanes through
2017.
Airlines continue to take advantage of low fuel costs to use
less efficient planes a while longer. AerCap renewed for a few
years leases on four-engine Airbus A340 jetliners that Mr. Kelly
said benefited from oil at around $60 a barrel, compared with $100
a barrel a year ago.
Mr. Kelly said the leasing company would look at opportunities
to buy new planes either directly from Airbus Group NV (AIR.FR) and
Boeing Co. (BA), or from airlines that have placed orders. The
leasing company's preference is for new-generation Airbus and
Boeing single-aisle jets, as well as their newest widebodies, the
787 Dreamliner from the Chicago-based planemaker and the A350 from
its European rival.
Write to Robert Wall at Robert.Wall@wsj.com
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