AerCap Boss Calls on OEMs, Lessors To Keep Buoying Airlines

 - October 5, 2021, 3:56 PM

The chief executive of AerCap believes the relationship between aircraft leasing companies and airlines has changed over the past 18 months, leading to more long-term arrangements such as lessors entering into airline shareholdings or holding unsecured claims. Airlines have encountered the worst crisis they have ever hit and the major lessors maintained enough financial strength to provide “huge amounts” of support, AerCap CEO Aengus Kelly said, speaking in a panel discussion at the International Air Transport Association (IATA) annual general meeting and world air transport summit in Boston on Tuesday. “We were at the operating table when airlines were coming back from the battlefield. We were giving blood infusions all the time,” he said.

The need for that support hasn't ended because airlines remain financially distressed and burdened with too much debt, Kelly asserted, while calling for the entire "ecosystem" to continue supporting operators over the next couple of years. “We all have been bleeding money," he conceded. "Everybody is weaker than they were before Covid, taking in more leverage.” But, he added, all involved need airlines to return to financial health. “If they are not able to be [financially] stable in three to four years, that is not good for any of us. So the OEMs, the lessors, the providers of capital and equipment, we all have to take our time with the recovery. We will have to do some more heavy lifting in the next couple of years.”

In return, Kelly expects airlines to show “recognition” for all the help they received. That gratitude should not be purely emotional, he insisted.  “If we see that at the end someone turns around and nickel-and-dimes us, that is not a partnership," he said.

Kelly also urged a quick opening of the transatlantic market, something the airline industry and trade body IATA “has to try to shape,” he told delegates. He described the transatlantic as the most important market; once it opens, other regions and countries will follow.  “Airlines cannot afford this to go wrong, this is so important for the recovery of the industry,” he said. Without a recovery of long-haul traffic, network airlines will not be profitable on the bottom line or in the long-term, he remarked.

Separately, Kelly said AerCap’s proposed takeover of the aircraft-leasing business of General Electric is “moving full speed ahead.” The companies secured regulatory approval from the “majority” of the 26 jurisdictions that need to clear the $30 billion deal.