AerCap revenue dips 30% in 3Q2009, Aircastle reports solid quarter – Suppliers Share Wrap

AerCap reported a 30% decrease in revenue in 3Q2009, with net income falling by a similar level, even as the company’s outlook for 2010 continues to improve.

AerCap continues to develop core leasing business

Revenue was severely affected by lower maintenance revenue and lower income from the sale of assets in 3Q2009. Overall lease revenue was down 8% year-on-year, but a 70% fall in maintenance rents (largely due to USD21.2 million of non-recurring maintenance revenue in 3Q2008) masked a 7% increase in basic lease rents, which account for almost 75% of the company’s revenue. Revenue from asset sales dropped from USD122.4 million in 3Q2008 USD49 million to 3Q2009.

Total revenue fell from USD301.9 million to USD212.5 million.

Expenses dropped from USD248 million to USD172.5 million, mostly due to a USD69.1 million fall in the cost of good sold and a USD18.1 million drop in interest costs.

Net income for the period was USD.35.5 million, down 30.1% year-on-year.

Klaus Heinemann, CEO of AerCap, noted continued growth in its core leasing business. Performance in emerging markets and by low cost carriers has begun to improve, and the market for the company’s narrowbody portfolio is expected to “rapidly rebalance”, as passenger growth resumes in 2010. erCap expects oil prices in the USD75-100 per barrel range

Aircastle “poised for growth”

Aircastle reported revenue was down 12.8% year-on-year. In a mirror opposite of AerCap, maintenance revenue was up strongly, jumping from USD5.4 million in 3Q2008 to USD31.4 million in 3Q2009. Core lease rental revenue was down 6.1% year-on-year, to USD128.3 million. The company reported a near 100% portfolio utilisation rate.

Adjusted net income was USD35.7 million, up USD0.7 million compared to 3Q2008.

Aircastle CEO Ron Wainshal commented that with the combination of strong operating performance and access to capital, the company is poised for growth and is now “actively pursuing new opportunities."

Aircastle stocks rose 0.8% at the end of trading on Friday, while AerCap stocks fell 0.8%. Other leasing companies lost ground, with Air Partner dropping 9.2% and Babcock & Brown Air falling 2.1%.

Selected Aviation suppliers’ daily share price movements (% change): 06-Nov-09