Air Lease (US:AL)2021-05-07 05:06Financial Data and Key Metrics Changes - For Q1 2021, total revenues were reported at $475 million, a decrease of 7% compared to the same period last year, while diluted EPS was $0.70, down 40% year-over-year [10] - The company faced an impact of approximately $86 million in rental revenues not recognized due to cash versus accrual basis revenue recognition and lease restructurings [10][33] - Cash collections and lease utilization rates were solid at 84% and 99.6% respectively, although slightly lower than Q4 [11] Business Line Data and Key Metrics Changes - The company took delivery of approximately $600 million in new aircraft during the quarter, which was $200 million more than initially anticipated [10] - Lease placements remained strong, with 95% of the order book placed on long-term leases for aircraft delivering through 2022 and 80% through 2023 [13] - The management business is growing, with over $600 million of aircraft sourced for Blackbird Capital II in a 100-day period [16] Market Data and Key Metrics Changes - The company noted a shift towards leasing, which now accounts for about half of the marketplace, driven by airlines' focus on operating younger aircraft and sustainability initiatives [13] - The recovery of air travel is anticipated as vaccination rates rise and travel restrictions ease, with TSA reporting over 1.6 million passengers per day recently, compared to below 200,000 a year ago [22][25] Company Strategy and Development Direction - The company remains committed to supporting airline customers through the pandemic, strengthening relationships and positioning itself as a long-term partner [12] - A focus on sustainability and operating younger aircraft is driving demand, with the company well-positioned to benefit from these trends [13][20] - The company plans to maintain its dividend policy and has extended its share buyback authorization, indicating a commitment to shareholder returns [38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of air travel and the company's ability to navigate the challenges posed by the pandemic [9][12] - The pace of requests for rent deferrals and lease restructuring has slowed significantly, indicating a shift towards recovery [11][70] - Management highlighted the importance of maintaining an investment-grade balance sheet and robust liquidity position, with $7.5 billion available at the end of Q1 [40] Other Important Information - The company announced a donation of $100,000 to COVID-19 relief efforts in India, reflecting its commitment to social responsibility [18] - The company is actively exploring supplemental aircraft investment opportunities outside of its order book [14] Q&A Session Summary Question: Can you discuss the impact of lease restructurings on future quarters? - Management indicated that lease restructurings are expected to continue but should decrease over time, with efforts to recover cash basis amounts [43][45] Question: What are the dynamics behind the lack of incremental acquisitions this quarter? - Management clarified that the absence of acquisitions in one quarter should not be interpreted as a change in market dynamics, emphasizing a selective approach to aircraft purchases [47][48] Question: How is the company managing customers who have not yet agreed to accommodations? - Management noted that the rate of deferrals and restructuring requests has significantly decreased, indicating a shift towards recovery [70]