The global aircraft leasing giant, Air Lease Corporation has released its latest results for the first quarter of 2021 showing a massive movement in operations and aircraft deliveries. The company took delivery of 10 aircraft during the first three months of the year, ending 31st March, which represents approximately $602 million in aircraft investments.
As of March 31, 2021, ALC owned 342 aircraft in its operating lease portfolio with a net book value of $20.8 billion, the average age of the aircraft was just 4.3 years and a weighted average lease term remaining of 6.9 years.
ALC's total revenues for the three months ended March 31, 2021 decreased by 7.1% to $474.8 million compared to last year. Despite the continued growth of the fleet, the revenues decreased in the first three months of 2021 compared to the first three months of 2020 as a result of the full quarter impact of the COVID‑19 pandemic, which only partially impacted the first three months of 2020 when the pandemic was still in its early stages.
John L. Plueger, Chief Executive Officer and President said: "We continued helping our customers through a difficult winter season in Q4 and Q1 and we are hopeful that the worst of the global pandemic is behind us. The world’s airlines need much more time for financial recovery, yet fleet renewal remains a top priority and we are heavily involved in this process. For Q1, we exceeded our aircraft investment expectations, and our operating cash flow increased modestly relative to last year’s pre-pandemic first quarter. We see accelerating domestic traffic recovery in multiple geographic regions, with expectations of improvement over the remainder of 2021 in regions still heavily impacted,"
Steven F. Udvar-Házy, Executive Chairman of the Board commented: “Lease placements from our forward orderbook are tracking well, as airlines recognize that re-fleeting with the most environmentally friendly and fuel efficient aircraft is key to their long term prosperity and future. Lease financing is increasingly critical to airline fleet restructuring, and ALC's focus on new aircraft places us at the leading-edge of industry demand. We believe the recovery in the US and China are harbingers of what will occur globally as travel restrictions are relaxed and vaccines are more widely distributed,”
Financial Highlights
| | Three Months Ended
March 31, | |
| | 2021 | | 2020 | | $ change | | % change | |
Revenues | | $ | 474.8 | | $ | 511.4 | | $ | (36.6) | | (7.1) | % |
Income before taxes | | | 103.5 | | | 171.7 | | | (68.2) | | (39.7) | % |
Net income available to common stockholders | | | 80.2 | | | 133.3 | | | (53.1) | | (39.8) | % |
Adjusted net income before income taxes(1) | | | 117.1 | | | 182.8 | | | (65.7) | | (35.9) | % |
Diluted earnings per share | | $ | 0.70 | | $ | 1.17 | | $ | (0.47) | | (40.2) | % |
Adjusted diluted earnings per share before income taxes(1) | | $ | 1.03 | | $ | 1.61 | | $ | (0.58) | | (36.0) | % |
Cash flows from operations | | $ | 234.3 | | $ | 234.0 | | $ | 0.3 | | 0.1 | % |
Financial Ratios
| | Three Months Ended
March 31, | |
| | 2021 | | 2020 | |
Pre-tax profit margin | | 21.8 | % | 33.6 | % |
Adjusted pre-tax profit margin(1) | | 24.7 | % | 35.7 | % |
Pre-tax return on common equity (trailing twelve months) | | 9.9 | % | 13.8 | % |
Adjusted pre-tax return on common equity(1) (trailing twelve months) | | 11.0 | % | 14.9 | % |
(1) | | Adjusted net income before income taxes, adjusted diluted earnings per share before income taxes, adjusted pre-tax profit margin and adjusted pre-tax return on common equity have been adjusted to exclude the effects of certain non-cash items, one-time or non-recurring items, that are not expected to continue in the future and certain other items. See note 1 under the Consolidated Statements of Income included in this earnings release for a discussion of the non-GAAP measures and a reconciliation to their most comparable GAAP financial measures. |
Flight Equipment Portfolio
ALC's owned fleet grew by 1.9% to a net book value of $20.8 billion as of March 31, 2021 compared to $20.4 billion as of December 31, 2020. As of March 31, 2021, the fleet was comprised of 342 aircraft in the operating lease portfolio, with a weighted-average age and a weighted-average remaining lease term of 4.3 years and 6.9 years, respectively, and 83 managed aircraft. As of March 31, 2021, ALC had a globally diversified customer base of 113 airlines in 59 countries.
During the quarter ended March 31, 2021, it took delivery of 10 aircraft from its order book. Approximately 73% of the net book value of its fleet were leased to flag carriers or airlines that have some form of governmental ownership.
ALC and airlines around the world have continued to experience delivery delays from Boeing and Airbus and have been impacted by ongoing manufacturer delays due to the COVID-19 pandemic, delays related to the grounding of the Boeing 737 MAX, temporary suspension of Boeing 787 deliveries, and pre-pandemic Airbus delays that remain ongoing. These delays and the ongoing COVID-19 pandemic have also impacted passenger growth and airline profitability and the firm expects this to continue. As a result of continued manufacturing delays and the impact of COVID-19, ALC's aircraft delivery schedule could continue to be subject to material changes and delivery delays could potentially extend well into 2022 and beyond.
he following table summarizes the key portfolio metrics of our fleet as of March 31, 2021 and December 31, 2020:
| | March 31, 2021 | | December 31, 2020 | |
Aggregate fleet net book value | | $ | 20.8 billion | | $ | 20.4 billion | |
Weighted-average fleet age(1) | | | 4.3 years | | | 4.1 years | |
Weighted-average remaining lease term(1) | | | 6.9 years | | | 6.9 years | |
| | | | | | | |
Owned fleet | | | 342 | | | 332 | |
Managed fleet | | | 83 | | | 81 | |
Aircraft on order | | | 349 | | | 361 | |
Aircraft purchase options(2) | | | 25 | | | 25 | |
Total | | | 799 | | | 799 | |
| | | | | | | |
Current fleet contracted rentals | | $ | 13.4 billion | | $ | 13.6 billion | |
Committed fleet rentals | | $ | 13.4 billion | | $ | 13.2 billion | |
Total committed rentals | | $ | 26.8 billion | | $ | 26.8 billion | |
(1) | | Weighted-average fleet age and remaining lease term calculated based on net book value of our operating lease portfolio. |
(2) | | As of March 31, 2021 and December 31, 2020, we had options to acquire up to 25 Airbus A220 aircraft. |
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