(Reuters) – Air Lease Corp said on Thursday aircraft delivery delays were not getting any better as labor and parts shortages roil the aerospace industry.
“Last year, we had delays on some aircraft that were like two to three months. And we had delays on A321neo that was 9 months… I can’t give you a mathematical average, but it’s certainly worse than three months, and it’s not getting any better,” Air Lease Chairman Steven Udvar-Hazy said during an investor call.
Airlines are queueing up to buy jets from Boeing Co and Airbus SE to tap into a greater-than-expected recovery in travel, but have had to turn to leasing firms for planes.
“We remain skeptical that Airbus and Boeing will meet their aspirational production rate goals over the next two to three years,” Air Lease Chief Executive Officer John Plueger said.
Earlier on Thursday, Airbus said it slowed the production ramp-up of key narrowbody models, while Boeing on Wednesday said the supply chain was not yet ready for production rate hikes.
The lack of aircraft has, however, powered lessors’ earnings in recent times as lease rates climb due to strong demand.
Delivery delays were also pushing airlines to extend their leases for an average of three years, Air Lease executives said, adding that it was really hard to predict the supply chain.
“We expect to see continued growth and strength in global air traffic and airline yields in 2023, offering a counterbalance to global macroeconomic cross-currents,” said Steven Udvar-Házy, executive chairman of the board.
Shares of Air Lease were up about 2.8% in extended trade, after the company reported fourth-quarter revenue of $601.6 million, compared with analyst estimates of $587.3 million.
The company reported a profit of $1.21 per share for the quarter ended Dec. 31, compared with analysts’ average expectations of $1.01 per share.
(Reporting by Shivansh Tiwary, Nathan Gomes and Abhijith Ganapavaram in Bengaluru; Editing by Krishna Chandra Eluri and Shailesh Kuber)
