Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: What is your view on the sales environment when OEMs start producing aircraft on time? Will the mix of buyers change? A: Aengus Kelly, CEO: I believe there will be a shortage of aircraft for years to come. Even when OEMs start producing more, it will take several years to reach targets. Current aircraft are more fragile and spend more time in the shop, so I expect continued strength in used aircraft values. Our portfolio is 75% new tech, which will increase over the next few years.
Q: Leasing expenses seemed elevated in the fourth quarter. Is this a new run rate going forward? A: Peter Juhas, CFO: Leasing expenses were slightly higher, running about $20 million more than other quarters. This is a reasonable run rate now, but leasing expenses can vary depending on the timing of events. I expect it to stay roughly around these levels in 2025.
Q: Of the aircraft not being extended, how many are transitioning? Does this affect net margin? A: Aengus Kelly, CEO: Very few aircraft transition, maybe a handful throughout the year. We manage the business to EPS and ROE, not net spread. Our ROE was 14% after tax, which is industry-leading. We allocate every dollar to drive ROE and EPS for shareholders.
Q: What percentage of the original book value has been recovered from Russia-related write-downs? A: Peter Juhas, CFO: The write-down was about $2.7 billion pretax. We've recovered $1.3 billion in 2023 and another $200 million in 2024, giving an idea of recovery relative to the initial book value.
Q: Do you see any benefit from pushing your credit rating higher? A: Peter Juhas, CFO: We're BBB+ with two rating agencies and on positive outlook with Fitch. Higher ratings could be beneficial, but our current spreads are historically tight. We'd welcome higher ratings, but the exact benefit is hard to quantify.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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