Air Lease profit, revenue rise on insurance payout and aircraft demand (updated)

Air Lease

04/08/2025 22:51

Air Lease CEO sees aircraft supply shortfalls for next 3-5 years

Demand for air freighters fluctuates due to U.S. tariff strategy

Air Lease cancels 2021 order for seven Airbus A350 freighters

Adds details throughout

By Dan Catchpole, Shivansh Tiwary and Anshuman  Tripathy

Aug 4 (Reuters) -
Aircraft lessor Air Lease Corp AL.N reported a rise in second-quarter profit and revenue on Monday, due to a $344 million insurance claim settlement plus robust aircraft rental demand.

Aircraft lessors have benefited from strong lease rates as airlines rush to secure jets amid persistent supply-chain challenges and limited aircraft availability. However, production delays at Boeing BA.N and Airbus AIR.PA have extended delivery schedules, limiting lessors' ability to fully capitalize on the rising demand.

Boeing and Airbus plan to increase output, but "even with those increases, which have not all been achieved by any certainty, there is still a shortfall in supply for the next three to five years," Air Lease CEO John Plueger said during a conference call with investment analysts on Monday.

The company confirmed that it canceled its 2021 order for seven Airbus A350 freighters last month. Delivery of the planes was already one year late, Plueger said during the call.

Demand for air freighters has fluctuated in recent months, he said, adding that it appears to stem from the United States' aggressive use of tariffs in trade negotiations.

The U.S. and European Union's provisional agreement to
exempt commercial aerospace goods
 from tariffs should be a "clear precedent" for the globe, he said.

Per the company's lease agreements, its customers are responsible for any applicable tariff payments, he noted.

Air Lease reported a net income of $374.1 million, or $3.33 per share, for the quarter ended June 30, compared with $90.4 million, or 81 cents per share, in the same period a year earlier.

Much of that increase was from a $344 million insurance claim settlement for aircraft which were blocked from leaving Russia after the country's invasion of Ukraine in February 2022. So far this year, Air Lease has received $676 million in settlement payments.

The company expects to recognize an additional net benefit of about $60 million in the third quarter of 2025 from the settlement of additional insurance claims.

Its revenue rose 9.7% to $731.7 million during the quarter.

 (Reporting by Shivansh Tiwary and Anshuman Tripathy in Bengaluru and Dan Catchpole in Seattle; Editing by Mohammed Safi Shamsi and Stephen Coates)

 ((Shivansh.Tiwary@thomsonreuters.com; +91 9708363192; X: @Shivansh_19_;))