AerCap (AER): Raising 2Q 2026 outlook on higher sales, partially offset by impact of Spirit; Remain Buy-rated

Research evidence excerpt

AerCap (AER): Raising 2Q 2026 outlook on higher sales, partially offset by impact of Spirit; Remain Buy-rated

Goldman Sachs AerCap (AER)

Industry Health

Following high-single digit growth in 2H 2024 and +10% year-over-year in January

2025, global traffic growth on a system basis decelerated in early 2025, averaging +4.7%

from February through December (latest available data per IATA). While we

acknowledge that results from February through April were noisy given year-over-year

calendar changes (e.g. Leap Year in February 2024, Lunar New Year shifting from

February in 2024 to January in 2025, and Easter shifting from March in 2024 to April in

2025), we note May through December comparisons are relatively clean from a calendar

perspective and growth averaged 4.7% over this period as well. For January through

May 2026, global system traffic growth slowed vs. 2025, reflecting increased geopolitical

tension (flying over Middle East hubs remains below pre-war levels) and capacity

reductions from many airlines across the globe given the related surge in jet fuel prices,

in our view. Following growth of +3.8% and +6.1% year-over-year in January and

February, respectively, growth decelerated to +2.1% in March before turning negative in

April and May at -3.4% and -2.2%, respectively (latest available data per IATA, Exhibit 1).

Trends followed a similar pattern in the US as momentum earlier in 2026 has been

negatively impacted by geopolitical tension/higher jet fuel prices, with TSA traffic +2.7%

in February and +1.7% in March slowing to flat in April before flipping negative in May

through July-to-date (Exhibit 3). While traffic trends reflect lower-than-planned global

and US capacity, over the last several weeks various US airline management teams have