AerCap Holdings N.V.: Let The Good Times Roll; 2Q26 Equity and Credit Considerations

Research evidence excerpt

AerCap Holdings N.V.: Let The Good Times Roll; 2Q26 Equity and Credit Considerations

gy to convert aerospace engines into gas-powered turbines is already

established. There is a perception in the markets that converted units may in the long-term

be less-efficient than the OEM produced aero derivatives. Whether this proves to be the

case over the long-term remains to be seen.

It was also evident in our research that both data center operators and hyperscalers

would strongly prefer to be connected to the grid over-time. If and when that becomes

possible remains a key uncertainty. Should grid capacity expand materially or alternative

technologies improve, demand for aero derivatives could be adversely effective. Taking

all this into account, any opportunity in this area must be evaluated against the industry-

leading that AerCap generates in our core business. While we continue to see

encouraging signs in the aeroderivative market, we will remain prudent and will only

pursue opportunities where we believe we have the right partners, sufficient operational

capabilities and a clear path to generating shareholder value over the long-term. And

we'll continue to update you as our assessment evolves.”

We do wonder if AER’s less aggressive stance here vs. “competitor” FTAI in regards to

this opportunity may result in some AER bulls being left disappointed that management

here isn’t more vigorous in the pursuit. We will continue to monitor this angle closely, but

we are left concluding that AER simply prefers the predictability of its time-tested engine

leasing model. At least for now.

• Widebody supply/demand remains structurally undersupplied, supporting lease

demand and asset values. Management emphasized that widebody availability is still