Air Lease sees continued downward pressure on aircraft lease rates, saying there is more "variability" in the market today than before.
"We are still seeing downward pressure," said John Plueger, chief executive of the Los Angeles-based lessor, during an investor presentation on 24 May. "In some regions of the world and campaigns we're getting higher lease rate factors, and in others lower lease rate factors."
These market variations are causing what he calls "wider lease rate variability" than two years ago.
Numerous airlines and lessors have reported falling lease rates in recent years, citing low capital costs and new entrants to the aircraft leasing sector, especially from Asia.
Lower capital costs have allowed ALC to maintain its margins, despite the net downward pressure, says Plueger.
Pre-tax margins at the lessor increased to 44.1% in 2016 from 38.5% in 2012, its financial statements show.
At the same time, ALC's average cost of capital has decreased to 3.42% in 2016 from 3.94% in 2012, the data shows.
The lessor received an investment grade BBB- rating, since upgraded to BBB, from Standard & Poor's in August 2013. It was rated BBB by Fitch Ratings this January.
Source: Cirium Dashboard