AerCap's Q4 2024: Unraveling Contradictions on Chinese Exposure, Boeing Strike, and Market Dynamics

These are the key contradictions discussed in AerCap's latest 2024Q4 earnings call, specifically including: Chinese Market Exposure, Boeing Strike Impact, Aircraft Supply and Demand Dynamics, and Lease Rates and Market Dynamics:



Strong Financial Performance and Shareholder Returns:
- AerCap reported GAAP net income of $2.1 billion and adjusted net income of $2.3 billion for 2024, with earnings per share of $10.79 and adjusted EPS of $12.01.
- The company announced a new $1 billion share repurchase program, bringing the total amount of buyback spent and authorized in the last 2 years to $5 billion.
- The financial performance was driven by strong operating cash flow, gains on sale of assets, and continued accretive capital deployment opportunities.

Aircraft Sales and Market Demand:
- During the fourth quarter, AerCap executed 812 transactions across its businesses, averaging more than 2 per day, with a gain on sale margin of 43% or 260% of the associated book equity.
- The company's record full-year gain on sale of $651 million was driven by a planning for a lower for longer supply environment, increased lease rates, and strong demand for aircraft.

Cash Flow Visibility and Future Lease Cash Flows:
- AerCap has $45 billion of contracted future lease cash flows in place on its existing fleet, with over 40% of these cash flows expected to be received in the next 3 years.
- The visibility into future cash flows allows for effective capital allocation, including a shareholder-friendly approach of returning capital to investors while deleveraging the balance sheet and increasing credit ratings.