Air Lease Corporation Reports 1.8% Revenue Growth, Decline in Net Income for Fiscal Year 2024

Air Lease Corporation (ALC) reported a modest increase in total revenues for the fiscal year ended December 31, 2024, reaching $2.7 billion, up 1.8% from $2.68 billion in 2023. This growth was primarily driven by increased aircraft sales and trading activity, alongside an expanded fleet. However, the company experienced a decline in net income attributable to common stockholders, which fell to $372.1 million, or $3.33 per diluted share, compared to $572.9 million, or $5.14 per diluted share, in the previous year. The decrease in profitability was largely attributed to higher interest expenses resulting from an increased composite cost of funds, which rose to 4.14% from 3.77% in 2023.

In terms of operational metrics, ALC's fleet expanded to 489 owned aircraft, with a net book value of $28.2 billion, reflecting a 7.4% increase from $26.2 billion in 2023. The company purchased 65 new aircraft during the year while selling 39, maintaining a strong lease utilization rate of 100%. ALC's customer base also remained diversified, with 116 airlines across 58 countries as of December 31, 2024. The company has commitments to purchase an additional 269 aircraft from Airbus and Boeing, with an estimated total commitment of $17.1 billion for deliveries through 2029.

Strategically, ALC has focused on enhancing its fleet with modern, fuel-efficient aircraft, which is expected to meet the growing demand for air travel. The company anticipates that the need for airlines to replace aging aircraft will further drive demand for its leasing services. However, ALC faces challenges due to ongoing delivery delays from manufacturers, particularly Boeing, which have been exacerbated by labor strikes and supply chain issues. These delays could impact the company's ability to fulfill its commitments and meet customer demand in the near term.

Looking ahead, ALC's management remains optimistic about the long-term fundamentals of the aircraft leasing industry, citing factors such as population growth and the expansion of the global middle class as drivers of air travel demand. The company expects lease rates to continue to rise, albeit at a pace that may lag behind increasing borrowing costs. ALC's financial strategy emphasizes maintaining an investment-grade balance sheet while returning excess cash to shareholders through dividends, which were declared at $0.85 per share for 2024, up from $0.81 in 2023. The board of directors has indicated a commitment to sustaining this dividend policy, contingent on the company's financial performance and market conditions.