Lessor AerCap raises guidance after record Q1 earnings

The world's largest aircraft lessor has had a better start to 2026 than almost anyone expected.

AerCap reported record adjusted net income of $889mn for the first quarter, or $5.39 per share, nearly 47 per cent above the analyst consensus of $3.67, and promptly raised its full-year adjusted earnings guidance to approximately $14.50 per share, up from the $12.00–$13.00 range it set at the start of the year.

The beat was not accidental. AerCap sold 41 aircraft during the quarter for $1.5bn, generating $291mn in gains at an unlevered margin of 24 per cent, or 1.9 times book value on an equity basis. A year earlier, 35 asset sales produced $177mn. The lessor is systematically monetising a portfolio it largely acquired at a discount through its 2021 takeover of GE Capital Aviation Services, and the returns are compounding.

The underlying lease business held its own. Basic lease rents rose 2 per cent year on year to $1.68bn, the annualised net spread widened to 8.0 per cent from 7.6 per cent, and interest expense fell 6 per cent as the debt book shrank. Adjusted return on equity reached 19 per cent. Book value per share climbed approximately 20 per cent year on year to $116.67.

The capital return was equally aggressive. AerCap spent $745mn buying back 5.4 million shares during the quarter — then immediately authorised a further $1.0bn repurchase programme through the end of 2026. The board also held the quarterly dividend at $0.40 per share.

Chief executive Aengus Kelly acknowledged the geopolitical backdrop, the Iran ceasefire, Middle East airspace disruption, and tariff uncertainty, but was direct on demand: aviation assets remain sought after, underpinned by travel volumes that continue to outpace supply. AerCap closed 286 transactions during the quarter and retained 87 per cent of leases up for extension.

The full-year $14.50 guidance excludes any further gains on sale. Q1 alone produced $291mn of them. That is the number to watch.