AerCap defers $300m in rents owed by airlines whose fleets are grounded

Irish aircraft leasing specialist AerCap has deferred about $300 million (€277 million) worth of rent from airlines while customers are seeking a further $300 million in deferrals, according to its chief executive, Aengus Kelly.

Dublin-based AerCap is one of the biggest aircraft lessors in the world. The group recently said it had revenues of $1.16 billion in the first three months of this year, unchanged on the same period in 2019.

Mr Kelly told industry analysts the Irish company had deferred $300 million of rents from airlines whose fleets had been grounded by the Covid-19 crisis, and expected to agree to defer the same amount for other customers shortly.

“The amount deferred is generally the equivalent of two to three months of rent and repayment generally begins four to six months after,” Mr Kelly said.

Aer Lingus schedules talks with trade unions on job cuts

---

About 1,100 workers at P&O Ferries to be laid off

---

Italy to inject €3bn into new Alitalia

---

Norwegian Air shareholders back rescue plan

---

He noted that against this $600 million in deferrals, AerCap had more than $1 billion in security deposits along with a further $1.6 billion in maintenance reserves.

Mr Kelly maintained that the airlines to which the company leased craft had good credit quality, so AerCap believed the chances of recovering these sums were high.

Chinese rents

He also confirmed that Chinese airlines, which deferred rent payments earlier in the year as coronavirus spread through the country, had begun paying AerCap again, as they had restarted flying.

“I can tell you that in the Chinese market, we are getting paid now again, the regular rate rental,” Mr Kelly said.

Companies such as AerCap buy aircraft from manufacturers including Airbus and Boeing and lease them to airlines around the world. Their revenues come from the rent paid by the carriers for the craft.

Another Irish aircraft lessor, Avolon, said last week that it expected to defer rents for many of its airline customers as travel restrictions aimed at containing the virus kept passenger fleets grounded.