Air Lease says aircraft delivery delays to persist for years
Reuters
Published May 01, 2023 06:28PM ET
(Reuters) - Air Lease (NYSE:AL) Corp said on Monday it expects delivery delays from Boeing (NYSE:BA) Co and Airbus SE (OTC:EADSY) to persist for several years, adding to the headaches of the aerospace industry amid a faster-than-expected recovery in travel.
"In recent weeks, we have received additional notices of delay from both Airbus and Boeing for 2023 and 2024 deliveries," Air Lease Chief Executive John Plueger said on an investor call.
"One OEM (original equipment manufacturer) has advised us to expect delays compared to originally contracted delivery dates through 2028," Plueger added. Boeing and Airbus did not immediately respond to requests for comment.
The constrained supply of jets has frustrated airlines, which then turn to aircraft lessors to expand their capacity to tap into the booming travel demand.
The shortage has powered lease rates, helping the Los Angeles-based leasing giant to post better-than-expected first-quarter earnings on Monday.
"Commercial aircraft demand is very high now and only seems likely to accelerate as traffic expansion continues at a strong clip," Air Lease Chairman Steven Udvar-Hazy said during the call.
While Air Lease benefits from the short supply of jets, the delays are also a headache for the company which has a $24 billion order backlog with both planemakers.
"We don't accept supply chain as a delivery excuse. We expect to be compensated for our late deliveries," added Plueger.
As of March 31, the aircraft lessor had commitments to purchase 376 aircraft from Boeing and Airbus for delivery through 2029.
Air Lease said in a regulatory filing on Monday that it is in discussions with the planemakers to determine the extent and duration of delivery delays.
The company reported net income of $118.3 million, or $1.06 per share for the quarter ended March 31, ahead of analysts' estimate of 99 cents, according to Refinitiv data.
Revenue rose 6.6% to $636.1 million, beating estimates of$607.5 million.
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Written By: Reuters
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