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WIKI ANALYSIS
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].
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. [2]
Business Financials
As seen in the charts below, Aircastle has experienced significant growth in the past 3 years.
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 industry is highly competitve. Aircastle's main competition are airlines as well as aircraft leasing companies. These include:
- CIT Group
- AerCap
- Macquarie Aircraft Leasing
- AWAS and Babcock & Brown
- IFLC
- GECAS
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