Air Lease Soars on Aircraft Demand, But Boeing Delays Loom

Air Lease Corporation (NYSE: AL) just delivered a blockbuster first quarter, with profits and revenues soaring on surging aircraft leasing demand and a major insurance windfall. The company’s net income jumped a staggering 274% to $364.8 million, while revenues rose 11% to $738.3 million. But behind the numbers lies a story of triumph—and a looming storm.

The Good News: A Lease-Led Rally

Air Lease is riding high on two key drivers: robust demand for aircraft leasing and a one-time $332 million insurance recovery tied to its former Russian fleet. The latter, which helped boost Q1 net income, is now 82% recovered—though investors should note that the remaining 18% of the write-off remains unresolved.

The real star, however, is the core leasing business. Rental revenues rose 5% to $645 million, while aircraft sales and trading revenues exploded 90% to $93 million. Selling 16 planes for $521 million—including a $61 million gain—showed the company’s agility in monetizing older assets. With a $741 million sales pipeline (including $552 million already under contract), Air Lease is primed to capitalize on tight aircraft supply.

The company’s fleet now totals 487 aircraft, modern and diverse, with a weighted-average age of just 4.7 years. And with 58% of its 2031 order book already leased, Air Lease is locking in future revenue long before planes even leave the factory.

The Red Flags: Boeing’s Delays and Debt Demons

But here’s the catch: Boeing is tanking Air Lease’s timeline. The company relies on Boeing’s 737 MAX and 787 models for 80% of its 2025 deliveries, but production delays have pushed many orders into 2026 and beyond. With global aircraft deliveries projected to drop 21% in 2025, Air Lease faces steeper competition for scarce new planes—and may be forced to rely more on used sales to fill gaps.

Then there’s the debt. Air Lease’s total debt hit $19.9 billion, with a debt-to-EBITDA ratio of 7.52x—among the highest in the sector. Interest expenses jumped 14% to $208.5 million, squeezing margins. While liquidity remains strong at $7.4 billion, rising rates could crimp profits further.

The Bottom Line: A Risky Bull Market in Planes

Air Lease’s Q1 was a triumph of execution—especially in monetizing its fleet and recovering losses. But investors must ask: Can this momentum last?

On one hand, the company’s $29.2 billion in committed future rentals and disciplined capital allocation (including a $0.22 dividend) suggest management is staying prudent. Meanwhile, demand for fuel-efficient planes remains white-hot, with airlines globally upgrading fleets.

On the other hand, Boeing’s delays could derail growth. If deliveries stay backlogged, Air Lease’s revenue could stall, and reliance on used sales might mean thinner margins. Add in the debt overhang, and this stock isn’t for the faint-hearted.

Final Verdict: Buy With Caution

Air Lease is a buy for investors willing to bet on long-term aviation demand—and who can stomach the risks. The stock’s $54.50 average price target (16% upside from recent levels) reflects cautious optimism, but a misstep on Boeing timelines or margin pressures could send shares tumbling.

The key metrics to watch:
- Boeing delivery updates: Any delays beyond 2026?
- Interest costs: Can they be controlled as rates rise?
- Sales pipeline execution: Will $741 million in pending deals close?

For now, Air Lease is a high-risk, high-reward play on the airline industry’s comeback. But don’t blink—this market’s turbulence could get ugly fast.

Final Take: Hold onto your seatbelt. This isn’t over yet.