AerCap NYSE: AER reported record third-quarter results and raised its full-year 2026 adjusted earnings guidance, citing strong aircraft leasing demand, asset-sale gains and maintenance-related income.
Chief Executive Officer Aengus Kelly said the aircraft lessor generated adjusted earnings per share of $6.56 in the third quarter, with adjusted return on equity reaching 22%. The company raised its full-year adjusted EPS outlook to approximately $20.70, excluding any additional gains on asset sales in the fourth quarter.
“Demand for our assets remains strong and continues to outstrip available supply,” Kelly said. He added that AerCap’s order book was fully placed through the end of 2027 and 80% placed through the end of 2028, including 131 aircraft added to the order book during the year.
Third-Quarter Results and Asset Sales
Chief Financial Officer Pete Juhas said GAAP net income was $949 million, or $6.17 per share, during the quarter. Adjusted net income totaled $1.09 billion, or $6.56 per share, after accounting for purchase accounting adjustments and related tax effects.
Basic lease rents were $1.698 billion, reflecting fleet growth and what Juhas described as a strong leasing environment. Maintenance revenue totaled $267 million before purchase accounting adjustments, while net maintenance contribution was $184 million.
Juhas cautioned that maintenance contribution is event-driven and may fluctuate substantially between quarters. He said the elevated contribution this year reflected the timing of end-of-lease compensation, maintenance reserve releases, buyouts and transition activity. AerCap expects net maintenance contribution to return to a more typical level of about $50 million per quarter in 2027.
Net gains on asset sales reached $353 million in the third quarter. AerCap sold 70 owned assets for $1.1 billion in sales proceeds, producing an unlevered gain-on-sale margin of approximately 45%, or 2.6 times book equity, according to management.
Kelly said the company’s asset sales are intended to support long-term portfolio management rather than simply maximize gains. He said AerCap has focused for years on building a portfolio of newer technology aircraft, freighters and older assets near the end of their useful lives that can be monetized through its engine and parts businesses.
As of the third quarter, 83% of AerCap’s aircraft fleet consisted of new-technology or freighter aircraft. Kelly said elevated sales in recent years were partly driven by efforts to reduce the company’s exposure to China.
Capital Returns, Liquidity and Outlook
AerCap repurchased 5.3 million shares for approximately $783 million during the third quarter. Through the first nine months of 2026, the company repurchased more than $2.2 billion of stock, representing about 10% of shares outstanding at the start of the year. The company also announced a new $1 billion share-repurchase program in September.
The company made its 10th consecutive quarterly dividend payment and said it has increased its dividend annually since introducing it in 2024. AerCap has paid more than $500 million in dividends since then.
At Sept. 30, AerCap had approximately $22 billion of total liquidity sources, including about $2.5 billion of cash, $10 billion of revolvers, $3 billion of other committed facilities, as well as estimated asset sales and operating cash flow. The company’s sources-to-uses coverage ratio was 1.8 times, reflecting about $10 billion of excess cash coverage.
Adjusted leverage remained at about two times net debt to equity, while secured debt as a percentage of total assets declined to 8% from 9% in the prior quarter. AerCap’s average cost of debt was 4.2%.
Juhas said the company expects full-year asset sales to exceed $5 billion, above its prior expectation of $4 billion to $5 billion. AerCap generated about $866 million of gains on sale during the first nine months of the year, including the third-quarter record.
Industry Conditions and Portfolio Strategy
Management said higher jet fuel prices have created uncertainty for some airlines and may pressure near-term profitability, particularly for carriers operating longer-haul, low-fare models. Kelly said airlines with more ability to pass higher fuel costs through to customers may be better positioned.
He said prolonged elevated fuel prices could lead airlines to pursue measures to strengthen liquidity, potentially creating sale-leaseback opportunities for AerCap. The company said it would assess such opportunities against its return thresholds.
Kelly said lease-rate movement is primarily tied to interest rates, noting that aircraft in AerCap’s order book scheduled for delivery over the next two years generally have pricing tied to changes in interest rates. He said AerCap does not expect significant lease-rate pressure on the company’s new-technology aircraft, freighter and engine portfolios, though older technology assets could face a more challenging environment.
On the widebody market, Kelly said conditions remained “extraordinarily strong” and said he did not expect a “tidal wave” of aircraft retirements, particularly among widebodies. He also said the company expects sustained demand for newer-technology engines, particularly in harsher operating environments where time on wing may remain limited.
Looking ahead, Juhas said AerCap’s net spread was 8.1% in the third quarter and is expected to remain near that level over the next several quarters. Over time, he expects modest improvement as certain aircraft are placed back on lease and leases originating during the COVID-era roll off, though higher interest expense remains a countervailing factor.
About AerCap (NYSE:AER)
AerCap Holdings N.V. is a global aviation leasing company headquartered in Dublin, Ireland, and listed on the New York Stock Exchange under the symbol AER. Through its subsidiaries, AerCap owns, manages and leases commercial aircraft, engines and helicopters to airlines and other aviation customers worldwide.
The company provides operating leases, finance leases, aircraft trading and asset management services. Its fleet portfolio includes aircraft from major manufacturers such as Airbus and Boeing, as well as engines and helicopters.
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