A
Overall grade
A
Financial quality
The sleeper story is AerCap's engine arbitrage machine: pulling engines from distressed airlines and instantly redeploying them at aircraft-equivalent lease rates while securing future delivery slots no competitor can access. The obvious headline is record earnings, but the real story is how geopolitical fuel pressure creates a structural moat. While everyone focuses on aircraft sales gains, the binding constraint is AerCap's unique industrial platform that can solve three-party problems simultaneously - something Kelly admits 'no other leasing company in the world can do.' The most revealing quote: management raised guidance to $14.50 despite saying fuel could pressure airlines if it 'persists for the next 3 to 6 months.' My view changes if lease extension rates drop below 80% or if they stop disclosing maintenance contribution normalization timeline.
The 30-second version
- Engine lease arbitrage is the sleeper goldmine
- Geopolitical fuel crisis creates structural advantage for AER
- Maintenance revenue spike is temporary but they're not quantifying the drop
What changed this quarter
| Metric | Prior | This quarter |
|---|---|---|
| GAAP Net Income | $633M ($3.79/share) in Q4 | $818M ($4.96/share) in Q1 |
| Adjusted Net Income | $660M ($3.95/share) in Q4 | $889M ($5.39/share) in Q1 |
| Adjusted ROE | 15% full-year 2025 | 19.4% in Q1 |
| Basic Lease Rents | $1.688B in Q4 | $1.682B in Q1 |
| Maintenance Revenue | $225M in Q4 | $190M in Q1 |
| Net Gain on Sale | $253M in Q4 | $291M in Q1 |
| Interest Expense | $474M in Q4 | $467M in Q1 |
| Leverage Ratio | 2.1x in Q4 | 2.1x in Q1 |
Accountability tracked
6 new promises made4 narrative shifts flagged6 prior promises graded
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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