Air Lease (AL 1.45%), a leading global aircraft leasing company, released its earnings for the second quarter of 2025 on August 4, 2025. The most notable development was a dramatic jump in GAAP net income for Q2 2025, largely due to a special insurance recovery linked to aircraft losses in Russia. The company’s GAAP revenue reached $731.7 million, beating analyst expectations by $18.2 million, while adjusted earnings per share landed at $1.40, outpacing the $0.81 non-GAAP estimate. Diluted earnings per share were $3.33, reflecting one-time gains. Overall, the quarter was defined by strong ongoing fleet fundamentals, robust global demand for leased aircraft, and a one-off profit boost from the insurance settlement.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS – Diluted | $3.33 | $0.81 | $0.81 | 311.1 % |
| Revenue | $731.7 million | $713.5 million | $667.3 million | 9.7 % |
| Adjusted Diluted EPS Before Income Taxes | $1.40 | $1.23 | 13.8 % | |
| Net Income Attributable to Common Stockholders | $374.1 million | $90.4 million | 313.8 % | |
| Adjusted Pre-tax Margin | 21.5 % | 20.6 % | 0.9 pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management’s guidance, as provided in Q1 2025 earnings report.
About the Business and Recent Focus
Air Lease specializes in purchasing modern, fuel-efficient passenger aircraft and leasing them to airlines worldwide. As a lessor, it provides airlines with access to new planes without the financial burden of full ownership. The company focuses on keeping its fleet young, typically leasing each plane during the most valuable part of its lifespan. As of June 30, 2025, it owned 495 aircraft, with an average age of 4.8 years and an average remaining lease term of 7.2 years.
The key to Air Lease’s business is managing fleet growth, maintaining high lease rates, and keeping operational costs in check. Geographic and customer spread, strict financial discipline, and investments in fuel-efficient planes are central to its long-term strategy. It also pays close attention to environmental standards, working to keep its fleet aligned with evolving airline and regulator requirements.
Quarter Highlights: What Drove the Results
The quarter stood out for a rare event: Air Lease recognized a $344 million net benefit from insurance settlements for its Russian fleet, which was written off during the onset of the Russia-Ukraine conflict in early 2022. This settlement pushed net income and diluted GAAP earnings per share much higher than usual. The company expects a further insurance gain of about $60 million in Q3 2025, but leaders made it clear these are not repeatable events.
Underlying operating results remained strong. Air Lease grew its owned fleet from 489 aircraft at December 31, 2024, to 495 aircraft at June 30, 2025, investing $892 million in 12 new deliveries. Rental revenue from airplane leases rose 11% from the prior year period to $679 million, supported by fleet growth. More lease extensions occurred at higher rates, especially for larger “widebody” planes, as airlines scrambled for capacity amid aircraft shortages. CEO John Plueger said, “Demand for aircraft, both on the leasing and sales side, remains robust and bodes well for margin expansion,” Placement rates remained high, with 100% of planes scheduled for delivery through the end of 2026 already leased, and 87% of 2027’s orderbook likewise placed.
Income from trading and selling aircraft dropped compared to Q2 2024. The company sold four aircraft for gains of $16.7 million, down from 11 aircraft bringing $39.8 million in gains in Q2 2024. Management noted this was due to fewer planes sold rather than weaker market conditions. Meanwhile, managed fleet operations shrank, with only 53 aircraft under management (down from 60 as of FY2024)
The company continues to diversify its customer and geographic exposure. Air Lease counted 109 airline customers in 55 countries. Europe and Asia Pacific remain its biggest markets, accounting for 40.5% and 36.1% of fleet book value, respectively.
Expenses moved up, consistent with revenue growth. Operating costs rose 9.2%, driven mainly by increasing depreciation charges due to new aircraft and higher interest costs. The interest burden reached $222.3 million, as the average “cost of funds” on company debt increased to 4.28% from 4.14% at year-end 2024. Despite these rises, adjusted pre-tax margins improved slightly to 21.5%, reflecting core profitability before the unusual insurance settlement.
Looking Forward and Guidance
Management reported sustained momentum for underlying fleet leasing, with strong global travel demand and ongoing aircraft supply shortages, while lease rates remained essentially flat year-over-year. Most of the order book for the next several years is already committed to long-term leases, with 100% and 87% of the expected orderbook placed for aircraft delivering through the end of 2026 and 2027, respectively, and approximately 58% of the entire orderbook placed for deliveries through 2031. The company expects to record an additional one-time insurance benefit of approximately $60 million in Q3 2025.
No explicit guidance was provided for full-year revenue or earnings. Managers said “there’s no change to our expectations for profitability this year.” and will update on future capital allocation decisions as more clarity emerges about the final insurance recoveries and opportunities for fleet or business expansion. Investors are watching interest expense trends, the pace of aircraft sales, regional diversification, supply chain impacts on delivery schedules, and any additional one-off items that could affect future results. The quarterly dividend was maintained at $0.22 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
