AerCap's Q1 2025: Navigating Contradictions in Capital Strategy, Tariff Risks, and Aircraft Demand

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Strong Financial Performance:
- AerCap reported GAAP net income of $643 million and earnings per share of $3.48, with adjusted net income of $679 million and adjusted earnings per share of $3.68.
- The company increased its 2025 full-year EPS guidance and announced a new $500 million share repurchase program.
- The growth was driven by strong demand and high utilization rates of 99% and extension rates of 84%.

Engine and Helicopter Opportunities:
- AerCap ordered 268 new LEAP engines in 2024, with over 120 delivered and 60 more expected by the end of the year.
- The company also agreed to purchase and lease back five new Leonardo AW189 helicopters with Equinor Energy.
- These investments are in line with the expansion of AerCap's operational capacity and the industry's shift towards direct leasing models.

Tariff Impact and Industry Dynamics:
- AerCap acknowledged the potential impact of tariffs on the aviation industry but noted the strong demand for aircraft.
- The company highlighted that current tariffs on aircraft are not having a significant impact, but the situation is evolving.
- AerCap is monitoring the situation and expects that certain outcomes could lead to increased demand for used aircraft.

Operational and Fleet Activity:
- AerCap managed to increase rents and credits by transitioning three midlife 787s between two customers, reflecting strong demand.
- The company extended 26 narrowbody aircraft with a North American customer, indicating long-term capacity planning.
- Demand for widebody aircraft, particularly 787s, remains robust due to limited supply and strong demand from airlines.