Wednesday, June 10, 2015

Seeking Alpha: AerCap Making The Best Of A Good Situation

These are good days to be in the aircraft leasing business, and even if AerCap's (NYSE:AER) performance hasn't exactly set the world on fire since my last update it has at least beaten the market and its closest peer Air Lease (NYSE:AL).

Looking ahead, the numerous projections out there of a decade-plus of 5% annual global air passenger growth should be supportive of the leasing industry. That said, I do worry that high margins and low rates could lead to an influx of capital into the industry. What's more, I'd note that this is an industry that has never really shown an ability to generate positive economic returns across a full cycle. While I still believe that AerCap is undervalued, and one of the best-run lessors in the industry, I'd at least keep an eye on the entry of new players and the trends in margins and ROE across the sector.

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AerCap Making The Best Of A Good Situation

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