AerCap Holdings N.V. Stock

AerCap Holdings N.V. (AerCap) engages in the business of aircraft leasing worldwide.

The company has a portfolio consisting of 3,532 aircraft, engines and helicopters, that were owned, on order or managed as of December 31, 2022. The company provides a wide range of assets for lease, including narrowbody and widebody aircraft, regional jets, freighters, engines and helicopters. The company focuses on acquiring in-demand flight equipment at attractive prices, funding them efficiently, hedging interest rate risk prudently and using its platform to deploy these assets with the objective of delivering superior risk-adjusted returns. During the year ended December 31, 2022, the company executed 895 aviation asset transactions.

Aircraft Leasing

AerCap is the global leader in aircraft leasing with customers in every major geographical region. As of December 31, 2022, the company owned 1,572 aircraft and managed 187 aircraft and had 435 new aircraft on order. As of December 31, 2022, the average age of the company’s owned aircraft fleet, weighted by net book value, was 7.2 years. During the year ended December 31, 2022, the company’ weighted average owned aircraft utilization rate was 96%, calculated based on the number of days each aircraft was on lease during the year, weighted by the net book value of the aircraft. Approximately 1% of the company’s owned aircraft were undergoing or designated for cargo conversion during the year ended December 31, 2022 and were not calculated as utilized.

AerCap Cargo is a global leader in the air cargo market, with more than 25 years’ experience and a global fleet of over 100 aircraft that are owned, serviced or committed for conversion. AerCap Cargo provides 12 types of modern narrowbody and widebody cargo aircraft to 16 customers around the world, including e-commerce, express delivery and general cargo operators. AerCap Cargo also plays a developmental role in the provision of new cargo options, including the Big Twin freighter program between AerCap Cargo and Israel Aerospace Industries, which involves the conversion of the Boeing 777-300ER aircraft into long-haul large-capacity freighters. AerCap Cargo was also involved in the development of the Boeing 767-300BDSF, as well as launching Boeing’s 737BCF freighter conversion programs and, more recently, the A321F freighter programs with EFW and ST Aerospace. AerCap Cargo’s largest customers are Amazon, Maersk and ASL Aviation.

Engine Leasing

AerCap is the world’s largest engine leasing company, with over 900 owned and managed engines (including engines owned and managed by the company’s Shannon Engine Support Ltd (SES) joint venture) with approximately 75 customers. The company’s owned engine portfolio is comprised almost entirely of General Electric (GE) and CFM International engines, the most liquid engine types that power the world’s most popular and in-demand aircraft, including Airbus A320 and A320neo Family aircraft and Boeing 737, Boeing 787, and Boeing 737 MAX aircraft.

The company has longstanding and deep relationships with two key engine original equipment manufacturers, GE Aviation and CFM International. The company manages the global spare engine pool for GE Aviation, and its joint venture SES manages the global spare engine pool for CFM International, in each case under a long-term management agreement. The two largest customers of the company’s engine leasing business are GE Aviation and SES, representing over 50% of the net book value of its owned engine portfolio. AerCap and GE Aviation agreed to continue their relationship following completion of the GECAS Transaction. In 2021, AerCap and Safran Aircraft Engines, the French aerospace manufacturer, entered into a 20-year joint venture agreement regarding SES.

Helicopter Leasing

The Milestone Aviation Group (Milestone) is the world’s leading helicopter leasing and financing company with 343 owned or on order helicopters as of December 31, 2022. Milestone partners with helicopter operators worldwide, providing a wide array of financial and productivity solutions, including operating leases, purchase and leasebacks, secured debt financing, engine leasing and fleet advisory services. Milestone supports over 50 customers in more than 40 countries serving a variety of industries, including offshore oil and gas, search and rescue (SAR), emergency medical services, police surveillance, mining and other utility missions. Milestone’s largest customers are CHC Helicopters, Bristow Helicopters, Saudi Aramco and Babcock International.

AerCap Materials

AerCap Materials Inc., (AerCap Materials) is a global distributor of airframe and engine components for leading commercial aircraft and engine manufacturers. AerCap Materials has its own dismantlement facility located in Greenwood, Mississippi. AerCap Materials has a large inventory of aircraft parts to support mid-life and new-generation aircraft and provides ready access to support various aircraft types, including Boeing 737NG, Boeing 777, Embraer, and A320/A320neo Family aircraft.

Aviation Leases and Transactions

The company leases most of its flight equipment to customers under operating leases. Under these leases, the lessee is responsible for the maintenance and servicing of the equipment during the lease term and it receives the benefit, and assume the risks, of the residual value of the equipment at the end of the lease. The company serves approximately 300 customers around the world with comprehensive fleet solutions. The company’s relationships with these customers help it place new flight equipment and remarket existing flight equipment.

The company’s operating leases have initial terms ranging in length up to approximately 16 years. By varying its lease terms, the company mitigates the effects of changes in cyclical market conditions at the time aircraft become eligible for re-lease.

The company requires its lessees to comply with either the United States Federal Aviation Administration (FAA), the European Union Aviation Safety Agency (EASA) or their equivalent standards in other jurisdictions.

Aircraft and Engine Services

The company provides aircraft and engine asset management and corporate services to securitization vehicles, joint ventures and other third parties. As of December 31, 2022, the company had asset management servicing contracts with 21 parties that owned 187 aircraft and 193 engines. The company’s primary aircraft and engine asset management activities include remarketing aircraft and engines for lease or sale; collecting rental and supplemental maintenance rent payments, monitoring aircraft maintenance, monitoring and enforcing contract compliance and accepting delivery and redelivery of aircraft and engines; conducting ongoing lessee financial performance reviews; periodically inspecting the leased aircraft and engines; coordinating technical modifications to aircraft to meet new lessee requirements; conducting restructuring negotiations in connection with lease defaults; repossessing aircraft and engines; arranging and monitoring insurance coverage; registering and de-registering aircraft; arranging for aircraft and engine valuations; and providing market research.

The company charges fees for its aircraft and engine management services based on a mixture of fixed and rental-based amounts, and it also receives performance-based fees related to the managed aircraft or engine lease revenues or sale proceeds.

The company also provides corporate administrative and cash management services to securitization vehicles and joint ventures. The company has corporate administration and/or cash management service contracts with eight parties. The company’s corporate administrative services consist primarily of accounting and corporate secretarial services, including the preparation of budgets and financial statements. Cash management services consist primarily of treasury services, such as the financing, refinancing, hedging and ongoing cash management of these companies.

Aviation Parts and Supply Chain

The company, through AerCap Materials, provides airframe and engine parts and supply chain solutions and it disassembles aircraft and engines into parts. AerCap Materials sells airframe parts to airlines, maintenance, repair and overhaul service providers, and aircraft parts distributors.

Business Strategy

The key elements of the company's strategy are to manage its flight equipment portfolio; and maintain a diversified customer base.

Joint Ventures

Shannon Engine Support Ltd (SES)

SES is a joint venture 50% owned by the company and 50% owned by Safran Aircraft Engines. SES is headquartered in Shannon, Ireland, with marketing offices in Beijing, China and Budapest, Hungary. SES offers spare engine solutions to CFM International operators, including guaranteed pool access, short-term and long-term leases, trading and exchanges, all of which can be structured and combined to meet an individual airline’s fleet requirements. SES’s spare engine pools are located at certified MRO facilities around the world, close to international logistics hubs, to easily support airlines operating CFM56 and LEAP powered aircraft.

Relationship with Airbus S.A.S (Airbus), The Boeing Company (Boeing) and Other Manufacturers

The company is one of the largest customers of Airbus and Boeing measured by deliveries of aircraft through 2022 and its order backlog. The company is also among the largest purchasers of engines from each of CFM International, GE Aviation, International Aero Engines, Pratt & Whitney and Rolls-Royce.

Facilities

The company leases its Dublin, Ireland headquarters office facility under a 25-year lease that began in December 2015, which has a termination right, at its option, in 2031. The company leases its Shannon, Ireland office facilities under four separate leases, one of which expires in 2033 with an option to terminate in 2029 and three of which expire in 2029 with options to terminate in 2024. The company leases its Singapore office facility under three leases that expire by February 2024. The company leases its Miami office facility under a lease that expires in December 2034. In addition to the above facilities, the company leases offices in various locations around the world, including Dublin, Ireland, Memphis, the United States, Amsterdam, The Netherlands, London, the United Kingdom, Shanghai, China and Dubai, the United Arab Emirates.

Trademarks

The company has registered the AerCap name with the European Union Intellectual Property Office and the United States Patent and Trademark Office, as well as filed the AerCap trademark with the World Intellectual Property Organization International (Madrid) Registry and various local trademark authorities. The Milestone Aviation Group LLC has registered the Milestone trademark with the United States Patent and Trademark Office, the European Union Intellectual Property Office, and various local trademark authorities.

Regulation

ITAR and the Export Administration Regulations (EAR) compliance are an integral part of AerCap’s compliance activities. As a result of the GECAS (GE Capital Aviation Services) Transaction, Milestone Aviation, a helicopter operating lessor which engages in defense trade activities, became a wholly-owned subsidiary of AerCap. While the company’s fleet consisted of civil helicopters, certain of the helicopters (generally helicopters configured for search and rescue (SAR) or police services missions) are equipped with controlled equipment covered by active the International Traffic in Arms Regulations (ITAR) licenses. In view of the company’s defense trade activities, The Milestone Aviation Group LLC is registered with the U.S. Department of State, Directorate of Defense Trade Controls (DDTC) as an exporter and broker under ITAR.

History

AerCap Holdings N.V. was founded in 1995. The company was incorporated in the Netherlands in 2006.