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| [[Image:aircastle_logo.gif|left|150px]] | [[Image:aircastle_logo.gif|left|150px]] | ||
| - | '''Aircastle''' ([[NYSE Euronext (NYX)|NYSE]]:AYR) is a global company that acquires and leases commercial jet aircraft to commercial and cargo airlines. Aircastle also invests in other aviation assets, including debt securities backed by commercial jet aircraft. As of February, 2008, Aircastle has acquired and committed to aquire more than 130 passenger and cargo aircraft, currently priced at $5.7 billion <ref> AYR 2007 10-K, Item 1: Business, page 1 </ref>. | + | '''Aircastle''' ([[NYSE Euronext (NYX)|NYSE]]:AYR) is a global company that acquires and leases commercial jet aircraft to commercial and cargo airlines. Aircastle also invests in other aviation assets, including debt securities backed by commercial jet aircraft. As of February, 2008, Aircastle has acquired and committed to aquire more than 130 passenger and cargo aircraft, currently priced at $5.7 billion <ref> AYR 2007 10-K, Item 1: Business, page 1 </ref>. All of Aircastle's aircrafts are high utility, as they are generally modern, operationally efficient jets with a large operator base and long lives. |
| - | The aircraft leasing industry is mainly tied to the supply and demand of aircraft, which is affected by the overall health of the airline industry. Aircastle leases their airlines on an operating lease basis, thus retaining the benefits or bearing the risks of the risidual aircraft value upon expiry of the lease. Operating leases are often used by airlines that need greater fleet flexibility and lower capital commitment. Aircastle's largest clients include U.S. Airways, Sterling Airways and Swiss International Air. <ref> AYR 2007 10-K, Item 1: Business, page 5</ref> | + | The aircraft leasing industry is mainly tied to the supply and demand of aircraft, which is affected by the overall health of the airline industry. Aircastle leases their airlines on an operating lease basis, thus retaining the benefits or bearing the risks of the risidual aircraft value upon expiry of the lease. Operating leases are often used by airlines that need greater fleet flexibility and lower capital commitment. Aircastle's largest clients include [[US Airways Group (LCC)|U.S. Airways]] , [[Sterling Airways]] and [[Swiss International Airlines]]. <ref> AYR 2007 10-K, Item 1: Business, page 5</ref> |
| == Business Financials == | == Business Financials == | ||
| - | As seen in the charts below, Aircastle has experienced significant growth in the past 3 years. | + | Aircastle's main revenue derives from operating leases and has a high customer concentration. As of March, 2006, the company's four largest customers (U.S. Airways, Hainan Airlines, Swiss International Airlines, Air India) accounted for more than 50% of total revenue. <ref> Bear Stearns Equity Research: "Aircastle Limited", Sept 18 2006, page 10</ref> |
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| + | As seen in the charts below, Aircastle has experienced significant growth in the past 3 years. From 2005 to 2007, the company grew its revenue by an average of 330% annually, and increased its operating income by an average of 509% per year. <ref> AYR 2007 10-K, Item 6: Selected Financial Data, page 40</ref> | ||
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| [[image:AYR Revenue vs income chart.JPG|center|400px]] | [[image:AYR Revenue vs income chart.JPG|center|400px]] | ||
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| == Competition == | == Competition == | ||
| - | The aircraft industry is highly competitve. Aircastle's main competition are airlines as well as aircraft leasing companies. These include: | + | The aircraft acquisition and leasing industry is highly competitve and fragmented. The companies compete in the leasing and re-leasing of aircraft, as well as in aircraft acquisition and sales. Thus Aircastle competes with airlines, aircraft manufacturers, other aircraft operating lessors, aircraft brokers and financial institutions. They main competition includes: |
| * '''CIT Group''' | * '''CIT Group''' | ||
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| * '''Macquarie Aircraft Leasing''' | * '''Macquarie Aircraft Leasing''' | ||
| * '''AWAS and Babcock & Brown''' | * '''AWAS and Babcock & Brown''' | ||
| - | * '''IFLC''' | + | * '''IFLC''' A subsidiary of American International Group, IFLC is the second largest aircraft opearting lessor with 866 aircrafts in assets. |
| - | * '''GECAS''' | + | * '''GECAS''' A unit of General Electric, they are the largest aircraft operating lessor. They own and manage 1,405 aircrafts. <ref> Bear Stearns Equity Research: "Aircastle Limited", Sept 18 2006, page 10</ref> |
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| + | Aircastle differs from its competitors in that it mainly focuses on seeking out high utility used aircraft and does not pursue manufacturers for new orders. | ||
| {{clr}} | {{clr}} | ||
Revision as of 11:56, April 9, 2008
Aircastle (NYSE:AYR) is a global company that acquires and leases commercial jet aircraft to commercial and cargo airlines. Aircastle also invests in other aviation assets, including debt securities backed by commercial jet aircraft. As of February, 2008, Aircastle has acquired and committed to aquire more than 130 passenger and cargo aircraft, currently priced at $5.7 billion [1]. All of Aircastle's aircrafts are high utility, as they are generally modern, operationally efficient jets with a large operator base and long lives.
The aircraft leasing industry is mainly tied to the supply and demand of aircraft, which is affected by the overall health of the airline industry. Aircastle leases their airlines on an operating lease basis, thus retaining the benefits or bearing the risks of the risidual aircraft value upon expiry of the lease. Operating leases are often used by airlines that need greater fleet flexibility and lower capital commitment. Aircastle's largest clients include U.S. Airways , Sterling Airways and Swiss International Airlines. [2]
Business Financials
Aircastle's main revenue derives from operating leases and has a high customer concentration. As of March, 2006, the company's four largest customers (U.S. Airways, Hainan Airlines, Swiss International Airlines, Air India) accounted for more than 50% of total revenue. [3]
As seen in the charts below, Aircastle has experienced significant growth in the past 3 years. From 2005 to 2007, the company grew its revenue by an average of 330% annually, and increased its operating income by an average of 509% per year. [4]
Key Trends and Forces
- Tightening government regulations
- Rising fuel costs will influence demand for aircraft leases
- Pessimistic airline industry outlook post-9/11:
Competition
The aircraft acquisition and leasing industry is highly competitve and fragmented. The companies compete in the leasing and re-leasing of aircraft, as well as in aircraft acquisition and sales. Thus Aircastle competes with airlines, aircraft manufacturers, other aircraft operating lessors, aircraft brokers and financial institutions. They main competition includes:
- CIT Group
- AerCap
- Macquarie Aircraft Leasing
- AWAS and Babcock & Brown
- IFLC A subsidiary of American International Group, IFLC is the second largest aircraft opearting lessor with 866 aircrafts in assets.
- GECAS A unit of General Electric, they are the largest aircraft operating lessor. They own and manage 1,405 aircrafts. [5]
Aircastle differs from its competitors in that it mainly focuses on seeking out high utility used aircraft and does not pursue manufacturers for new orders.
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References
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