Air Lease Reports Q1 2025 Financial Results
Air Lease Corporation , a leading aircraft leasing company, reported robust financial results for the first quarter ended March 31, 2025, reflecting solid operational performance, expanding fleet size, strong aircraft trading activity, and significant insurance settlement gains related to its formerly leased aircraft in Russia.
Chief Executive Officer and President John L. Plueger commented, “We had a strong quarter marked by strategic fleet expansion, substantial aircraft sales activity, and successful settlements on insurance claims stemming from aircraft stranded in Russia. Importantly, we’ve now achieved our target debt-to-equity ratio, enabling us to evaluate a broader range of capital allocation options going forward. With no exposure to countries subject to reciprocal tariffs on aircraft, we continue to benefit from the global demand for commercial aircraft in both the leasing and trading markets, particularly as supply constraints remain elevated.”
Financial Highlights for Q1 2025
Air Lease posted total revenues of $738.3 million for the first quarter of 2025, an increase of 11.3% from $663.3 million in the prior-year quarter. Operating expenses rose by 13.4% to $598.6 million, primarily reflecting increased depreciation, interest expenses, and general administrative costs. Nevertheless, income before taxes surged to $471.7 million, a dramatic rise from $135.3 million in the same quarter a year earlier—an increase of 248.6%.
The company’s net income attributable to common stockholders rose to $364.8 million, or $3.26 per diluted share, compared to $97.4 million, or $0.87 per diluted share, in Q1 2024. This performance was bolstered by a $331.9 million net benefit from insurance claim recoveries related to its previously written-off Russian aircraft fleet. Adjusted net income before income taxes—excluding one-time items and non-cash effects—was $169.5 million, up 15.9% from $146.3 million in the prior year. Correspondingly, adjusted diluted earnings per share rose to $1.51 from $1.31.
The company’s adjusted pre-tax margin stood at 23.0%, compared to 22.1% in Q1 2024, while its pre-tax margin including non-recurring items reached 63.9%, up sharply from 20.4%. Adjusted pre-tax return on common equity was 9.0% on a trailing twelve-month basis.
Key Operational Metrics and Strategic Milestones
During the first quarter, Air Lease took delivery of 14 new aircraft from its orderbook, representing an investment exceeding $800 million. By the end of the quarter, the company’s owned fleet totaled 487 aircraft, complemented by a managed fleet of 57 aircraft. The firm ended the period with more than $32 billion in total assets.
Significantly, the company reached a key inflection point in March with the resolution of a long-standing insurance issue involving its Russian fleet. Air Lease recognized a $331.9 million net benefit from insurance settlements during the quarter, with a further $226.7 million in cash proceeds received after the reporting period. As of May 5, 2025, the company had recovered approximately 82% of its previously written-off value for aircraft stranded in Russia, marking substantial progress on this front.
Air Lease also completed the sale of 16 aircraft during the quarter, generating $521 million in proceeds and recording $61 million in gains. This compared favorably to $23 million in gains from five aircraft sales in Q1 2024, signaling strong demand and favorable market conditions in aircraft trading.
Looking ahead, the company has approximately $741 million in its aircraft sales pipeline. This includes $552 million in flight equipment held for sale and $189 million worth of aircraft currently under letters of intent for future sales.
Portfolio and Leasing Activity
As of March 31, 2025, the net book value of Air Lease’s fleet stood at $28.6 billion, up slightly from $28.2 billion as of year-end 2024. The portfolio included 352 narrowbody aircraft and 135 widebody aircraft, with a weighted average fleet age of 4.7 years and a weighted average remaining lease term of 7.2 years. The company’s global customer base included 112 airlines across 57 countries, reflecting strong geographic diversification and market reach.
Air Lease has placed 100% of its aircraft deliveries through the end of 2026 on long-term leases and has secured lease placement for 89% of its deliveries through 2027. Approximately 58% of its entire aircraft orderbook, which extends through 2031, is already placed with customers, underscoring the high demand and careful planning behind its growth strategy.
The company reported $29.2 billion in committed minimum future rental payments as of March 31, 2025. This includes $18.9 billion tied to existing fleet leases and $10.3 billion related to future aircraft deliveries.
Financial and Capital Markets Activity
In a further sign of financial strength and market confidence, Air Lease announced the successful expansion of its syndicated unsecured revolving credit facility. On April 30, 2025, the facility’s capacity was increased to $8.2 billion, supported by 52 financial institutions, and its maturity was extended to May 2029. This enhancement provides the company with increased financial flexibility to pursue growth opportunities, manage capital expenditures, and optimize its capital structure.
Additionally, the company’s board of directors approved a quarterly cash dividend of $0.22 per share on May 2, 2025. The dividend will be paid on July 9, 2025, to shareholders of record as of June 4, 2025. This consistent dividend underscores Air Lease’s commitment to returning value to shareholders, supported by strong cash flow generation and earnings growth.
Segment Performance and Cost Trends
Rental revenues for Q1 2025 increased approximately 5% year-over-year to $645 million, driven by fleet growth and continued lease activity. However, the quarter saw a decline in end-of-lease revenue, totaling a decrease of $12.7 million compared to Q1 2024, due to fewer lease terminations.
Revenues from aircraft sales, trading, and other sources rose sharply by 90% to $93 million, compared to $49 million in the prior-year period. This significant increase was fueled by heightened trading activity and favorable market conditions for used aircraft.
Operating expenses rose to $598.6 million, up from $528.0 million in Q1 2024. This increase reflects higher interest costs due to rising financing rates, as well as a $17.1 million rise in compensation expenses. The latter was primarily attributed to executive retirement-related costs, including $9.2 million in general and administrative expenses and $7.4 million in stock-based compensation linked to the transition.
Outlook and Strategic Priorities
With most of its orderbook placed through the next several years and a growing global customer base, Air Lease is well positioned to capitalize on persistent supply shortages and surging demand for fuel-efficient aircraft. The company remains disciplined in capital deployment and fleet management, emphasizing long-term lease contracts with high-quality airline operators.
The substantial recovery from its Russian fleet insurance claims has also strengthened its balance sheet, allowing the company to evaluate a range of capital allocation strategies, including shareholder returns, debt reduction, and potential acquisitions.
“Given the strength of our fleet placement, the quality of our customer base, and the favorable demand dynamics in the commercial aviation market, we believe Air Lease is exceptionally well positioned for continued growth and value creation,” said Plueger.
As the industry continues to rebound from the lingering effects of the pandemic and aircraft delivery delays remain a bottleneck, Air Lease’s strategy of securing early placement and maintaining a young, diversified fleet offers a clear competitive edge.