The world's largest aircraft lessor AerCap does not see the supply of engine parts catching up with demand by 2030, its chief executive said today, a situation that will prolong aircraft manufacturers' struggles amid labour and parts shortages.
AerCap chief executive Aengus Kelly said that while issues around the manufacturing of airframes will be more easily resolved, the finite supply of parts to build and repair engines will make it much harder to turn around.
"The manufacturers of those parts way back up the supply chain that do the castings are not going to increase that significantly anytime this decade as far as I understand. So I think we will see the engine issues persist through the decade," Kelly told an analysts' call today.
The Dublin-based firm today reported a record net income for 2023 of $3.1 billion and $1.1 billion for the fourth quarter of last year.
AerCap also returned $2.6 billion to shareholders during the year and announced a new $500m share repurchase scheme today.
Aengus Kelly said that 2023 was a record year for the company across many fronts.
"These results reflect the continued strong operating environment across our businesses and the positive momentum for leasing and sales of aircraft, engines and helicopters," he said.
"In addition, this quarter we collected over $600m of insurance settlements, for a total of $1.3 billion collected during 2023," he said.
"Given the strong tailwinds that we see for demand for aircraft, engines and helicopters, we are confident about the outlook for AerCap in 2024 and beyond," he added.
As of December 31, AerCap's portfolio consisted of 3,452 aircraft, engines and helicopters that were owned, on order or managed.
The average age of the company's owned aircraft fleet at the end of 2023 was 7.3 years (4.5 years for new technology aircraft, 14.2 years for current technology aircraft) and the average remaining contracted lease term was 7.3 years.
AerCap also said today that turing the fourth quarter of 2023, it recognised recoveries related to the Ukraine conflict of $614m.
It said this mainly consisted of cash insurance settlement proceeds received from four Russian airlines and their Russian insurers in settlement of the company's insurance claims in respect of 50 aircraft and five spare engines on lease to these airlines at the time of Russia's invasion of Ukraine in February 2022.
