Reasons for the difference between our estimates and that of AerCap likely are the actual year-end value of the flight equipment as well as the depreciation formula used. That is fairly consistent with the 5% that AerCap claims to be its portfolio exposure to Russia. When keeping into mind lease returns, the percentages are 4.6 to 5.1 percent. Expressed as a percentage of all flight equipment value, AerCap had 5.1% of its fleet positioned in Russia and 5.7% when expressed as a percentage of commercial aircraft (does not included engine leases and helicopter leases). This includes the helicopter and engine leasing business.
Aercap stock news pro#
To that we should also add the flight equipment held for operating lease by GECAS which including adjustments would amount to $23.6 billion according to pro forma statements bringing the combined value to roughly $58 billion.
Aercap stock news full#
Since AerCap has yet to provide its Q4 2021 and full year results we don’t know the exact value of the flight equipment by year-end but we do know that the value was $34.4 billion in Q3 2021. Using a steeper method, the value would be around $2.1 to $2.3 billion.įurther context needs to be provided by expressing this as a percentage of the flight equipment.
Some aircraft seem to be stored outside of Russia, which makes repossession easier and when keeping this into account we saw around $2.7 billion worth of flight equipment currently locked in Russia for world’s biggest aircraft lessor. However, if we narrow this down to AerCap, we get to $3 billion for the combination of GECAS and AerCap. So, 70% of the leased flight equipment is provided by lessors outside of Russia. By doing so, we obtained an estimated $13.1 billion leased to Russian airlines by foreign lessors using a 25-year straight line depreciation and 5% salvage value. Of this $22.5 billion, $18.8 billion worth of equipment is leased and this can be narrowed down further when excluding Russian lessors. Our research covering nearly 950 aircraft resulted in an estimated value of $22.5 billion worth of flight equipment operated by Russian airlines. In order to get somewhat of an impression of the flight equipment that is exposed to Russian operators and laws that pave the way for the leased assets to be nationalized, we use the TAF Airline Fleet Monitor Russia.Īirline fleet Russia for AerCap (AeroAnalysis)
Russian airlines smaller in the big picture In this report, I will have a closer look at the AerCap ( NYSE: AER) fleet in Russia, the insurance policy and I will provide a fair value estimate on shares of AerCap. In a recent report, I explained why Russia is highly dependent on leased aircraft and using the TAF Airline Fleet Monitor Russia I provided an estimate of the complete Russian airline fleet as well as the leased asset value, which stands at $20.4 billion dollars.
The sanctions require lessors to wind down their business with Russian airlines but the way the sanctions have been implemented have made it nearly impossible to repossess a large quantity of aircraft. Following the invasion of Ukraine, sanctions have been imposed against Russia with the aerospace and airline industry being one of the main targets. Also in Russia, many aircraft are leased through Western lessors. Therefore, airlines often lease aircraft instead of owning the aircraft which also provides the operator with some flexibility. Financing such aircraft can be challenging for airlines.
Including GECAS assets according to pro-forma statements this should be around $2.9 billion.Īircraft are complex machines that are worth tens of millions of dollars and the bigger wide body aircraft even have sales prices north of $150 million. Nantonov/iStock Editorial via Getty ImagesĪuthor's Note (): A previous version of this report mentioned an incorrect amount for AerCap's estimated value of assets in Russia.
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