Aercap, one of the largest airplane lessor company in the world, has seen its stock price decimated by almsot 60% as the Covid-19 epidemic takes a toll on the air travel and tourism industry. Aercap’s is facing the biggest challenge ever faced and priced as if all of their customers, the airline companies, are going bust. Aercap is a creditor and they are facing requests from airline companies to defer their lease payments. I feel that the company’s balance sheet is strong enough to survive this pandemic and come out stronger on the other end.
Aercap’s (NYSE:AER) is a relatively simple business, but it does not mean that it is easy to run. To put it simply;
They borrow money from capital markets like financial institutions, Uses that money to purchase aircrafts from manufacturers like Boeing and Airbus.Sometimes they purchase directly from airlines through sale and leaseback operations.They