Commercial aircraft lessor Air Lease Corp. (ALC) posted $84.9 million in net income for the 2017 first quarter, down 8.5% from $92.9 million in 1Q 2016.

Los Angeles-based ALC’s revenues for the quarter totaled $360.2 million, up 4.9% over $343.3 million in the year-ago quarter. The company’s expenses increased 13.5% year-over-year (YOY) to $226.3 million; operating income for the quarter was $133.9 million, down 7% YOY.

“Throughout the quarter, we saw solid lease demand … including robust placements of both our new generation single-aisle and twin-aisle aircraft. We also continue to see demand from buyers of our used Boeing and Airbus aircraft,” ALC executive COB Steven Udvar-Házy said. “We view the slowing of new aircraft orders as healthy for the industry in the face of record backlogs and ongoing strain in the global supply chain.”

“During the first quarter, we … focused on a strategic opportunity to sell and manage a portfolio of 19 mid-life aircraft,” ALC CEO and president John Plueger said, referring to ALC’s agreement with Thunderbolt Aircraft Leasing Limited, a group of third party investors who closed a $344.7 million fixed rate notes offering, backed by the portfolio of 19 aircraft, on May 4. The aircraft are a mix of narrowbodies and widebodies, average age 12.5 years, which were leased to 17 lessees based in 13 countries. ALC and its Irish affiliate ALC Aircraft Limited will act as servicers of the aircraft; ALC expects to sell all of the aircraft by the end of 2017.

“Looking forward, we [will continue] to capitalize on incremental aircraft acquisition opportunities to help offset further delays on Airbus deliveries,” Plueger said. As of April 30, ALC has seven A320neos, one A321ceo, 129 A321neos, 25 A330-900s, 20 A350-900s and nine A350-1000s in Airbus’ order book queue. From Boeing, ALC has 120 737s and 43 787s in its unfilled order queue as of April 30.

ALC signed 34 aircraft lease agreements and 19 letters of intent with five new airline customers during the quarter. As of March 31, ALC’s fleet comprised 243 owned aircraft and 31 managed aircraft, at an aggregate net book value of $12.6 billion, with a weighted-average age of 3.7 years and a weighted average lease term remaining of 6.9 years.

ALC took delivery of 11 aircraft during the quarter, valued at $825 million, including two Airbus A320-200neos, six Boeing 737-800s, two 777-300ERs and one 787-9.

Mark Nensel