Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you walk us through what you think will get Air Lease Corp back to mid-teen adjusted pre-tax ROEs seen before the pandemic? A: John Plueger, CEO, stated that achieving mid-teen ROEs is expected within two to three years, considering positive factors and headwinds. Greg Willis, CFO, added that the timing of interest and lease rates will play a crucial role, but there are no impediments to reaching the ROE target over time.
Q: Should we expect the net spread margin to increase similarly to the fleet lease yield over the next few years? A: Greg Willis, CFO, mentioned that for 2025, margins are expected to be around the same levels as 2024, largely dependent on interest rates. Lease yields are expected to steadily increase, but it will take time to reflect in the business.
Q: Have you considered increasing aircraft sales in the current strong market to prove the value proposition of the equity? A: Greg Willis, CFO, indicated that Air Lease plans to maintain sales at about $1.5 billion in 2025, similar to 2024. Sales are largely opportunistic, and while they are open to increasing sales if compelling reasons arise, the current plan is to maintain the current level.
Q: Are lease renewals getting better in the current environment, and how do you see this impacting future lease rates? A: John Plueger, CEO, confirmed that lease renewals are improving, with higher rates on single-aisle aircraft and stable rates on wide bodies. This trend is expected to continue into 2025, contributing to stronger lease yields.
Q: Given the current stock price, what would be the top priority for capital deployment once Air Lease reaches its leverage target? A: John Plueger, CEO, stated that a stock buyback is a strong possibility given the current compelling value of the stock. However, the final decision will be made once the target debt-to-equity ratio is achieved.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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