AL - Air Lease Corporation

[Ross812]

Ross are you still looking at at the Air lease industry?

 

If yes, do you have some thoughts concerning Atlas Air Worldwide Holdings:

 

- Recently hit 52wk low

- A lot of (relatively new) 747-8F which I think are still quite functional (exposure to written off models such as 747-200 and 757 is relatively limited). They even have some 777's

- Clients are relatively large clients (which means late notice termination of contract could be a (serious) concern

- Still have guarantued revenue of 2.3 bn (vis a vis 2013 revenue of 1.7 bn)

- 300 cash on balance and leverage that I would suspect to be manageable

 

Any comments? Thanks!

 

Packer is right that ATSG is the cheapest cargo plane leaser though AAWW is higher quality asset wise going by memory from when I looked into ATSG and a brief glance at AAWW. I am not a fan of the cargo plane leasing business. The economics are similar to ship leasing where cargo carriers are only concerned with costs and airport accessibility. As an investor you are looking for earnings yield, management, and how nimble the company can be, and how they structure their contracts. GECAS, ILFC, and AL compete in a different playing field. AL has differentiated themselves by stocking new planes and getting selling everything else. They can be compared to a three year car lease co. vs a longterm ship leaser.