AerCap Holdings N.V.

Good day and welcome to Airtap's second quarter 2022 financial results. Today's conference is being recorded and a transcript will be available following the call on the company's website. At this time, I would like to turn the conference over to Joseph McGinley, Head of Investor Relations. Please go ahead, sir.

Thank you, Operator, and hello, everyone. Welcome to our second quarter 2022 conference call. With me today is our Chief Executive Officer, Ingus Kelly, and our Chief Financial Officer, Pete Duhass. Before we begin today's call, I would like to remind you that some statements made during this conference call, which are not historical facts, may be forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied in such statements. AIRCAP undertakes no obligation other than that imposed by law to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after this call. Further information concerning issues that could materially affect performance can be found in AirCap's earnings release dated August 11, 2022. A copy of our earnings release and conference call presentation are available on our website at aircap.com. This call is open to the public and is being webcast simultaneously at aircap.com and will be archived for replay. We will shortly run through our earnings presentation and will allow time at the end for Q&A. As a reminder, I would ask that analysts limit themselves to one question and one follow-up. I will now turn the call over to Angus Kelly.

Thank you for joining us for our second quarter 2022 earnings call. I am pleased to report another quarter of strong earnings and profitability for AirCamp. During the second quarter, we generated $1.91 of adjusted earnings per share and adjusted net income of $464 million. As we continue to capitalize, on the increasing global demand for aircraft. It is, of course, AirCap's platform and its people that underpins our success. During the quarter, the AirCap team executed 184 transactions, which included 125 long-term lease agreements, 16 purchases, and 43 sales. This was a tremendous achievement and gives us an unparalleled level of information about both global and regional supply and demand. This unrivaled knowledge combined with the skill sets and know-how of our new colleagues keeps AirCap in its market-leading position. Global passenger traffic continues to increase with approximately 75,000 daily flights taking place in the four major regions at the beginning of August. This is up nearly 20% or 12,000 flights per day in the last three months alone. As you'll see from slide four, this increase was driven by China predominantly, which grew by approximately 7,000 daily flights in that period of time as a result of the loosening of quarantine restrictions. China is currently taking its biggest steps towards loosening COVID controls since the pandemic began. we have seen a relaxation on quarantine length and PCR testing requirements. Encouragingly, the US and Europe and the rest of Asia have also continued to make progress despite numerous issues around staffing for airlines and airports in many parts of the world. Ryanair, as one example, flew 9% more passengers in the second quarter of 2022 versus the second quarter of 2019. Many airlines have underestimated the underlying strength of travel demand, having overcorrected on the way down, and are now playing catch-up. This again demonstrates how much people want and need to travel. Domestic travel continues to lead the way, with international travel still lagging somewhat behind, though this too is improving. As you can see from slide 5, Of the 190 countries where we track travel patterns, 103 of them have now surpassed 80% of 2019 total traffic, with a particular acceleration from February of this year. Furthermore, the number of countries which have already surpassed 2019 traffic levels has more than doubled since the start of the year to 25. This shows that the recovery is truly global in nature. I firmly believe that as borders fully reopen, we will see the same rebound in international travel that we saw in the domestic markets. Given the level of inquiry and demand we are seeing for wide-body aircraft, it is clear that the airlines are also convinced of this. To this end, we added a further five Boeing 787 orders at the Farnborough Airshow, which will deliver in 2024. This takes our total 787s to 125, of which 99 have already delivered. Following the positive developments between the FAA and Boeing regarding the resumption of 787 deliveries, we expect to receive one 787 this year. Of course, we would not have placed orders for further equipment unless we were confident that Boeing would solve the certification issues on the 787. and that the aircraft will form the backbone of the long-haul market for many years to come. We fully expect that when international travel to China is permitted to fully reopen, there will be a massive surge in demand, which will further bolster both wide-body and narrow-body aircraft demand. We saw this a few months ago on the transatlantic market when the United States removed the COVID entry test requirements. and bookings were reported to be off the charts, according to United CEO. This strong demand for long-haul travel was also confirmed by Lufthansa last week when they reported that their bookings are strong through the end of the year. Moving on to supply. As I referenced last quarter, there are approximately 2,000 fewer aircraft flying today relative to the OEM's expectations in 2018, which is more than a whole year's narrow-body production. This is due to a number of factors, including supply chain disruption, certification and production issues, as well as staffing problems, none of which are likely to be resolved quickly. It is clear to me that many airlines share this view, which is manifesting itself in greater demand for lease extensions and feeding into higher lease rates. The supply chain disruptions are challenging the OEMs to find a balance between supporting the in-service fleet of aircraft, i.e. those aircraft already delivered to airline customers, and new equipment deliveries. For example, there is a shortage of spare engines at the moment as a result of increasing aircraft production rates, new technology maturation issues, and labor-related supply of spare parts. This means airlines with aircraft on the ground are requesting spare engines to be diverted from new aircraft deliveries, thereby limiting new aircraft delivery rates from Boeing and Airbus. The engine manufacturers are working through demand scenarios to appropriately allocate their limited supply chain resources. Firstly, to support the in-service fleet of aircraft, and secondly, to meet their production obligations to Boeing and Airbus. Airbus recently delayed their plans to get to a monthly production rate of 65 on the A320neo family to early 2024 from mid-2023. But even that seems somewhat optimistic, given all that is going on. Likewise, as I referenced earlier, Boeing hasn't delivered a 787 for 21 months, And they are also being held back by the engine manufacturers from increasing their 737 MAX deliveries beyond their current 31 a month rate. So what do airlines do in the meantime? They turn to the leasing companies where delivery certainty is higher as we have closer in time delivery slots or we provide already built aircraft. You have seen from the Farnborough Air Show a few weeks ago that the level of orders was relatively muted. This is not from lack of demand, rather lack of availability. As a result, lease rates are going up and demand for used aircraft is robust. Aircap's spare engine leasing business is well positioned to support both our airline and OEM customers in this climate of new technology maturation, supply chain constraints, and post-COVID cash management at the airlines. AirCap has the largest spare engine leasing portfolio in the world, which positions us well to capitalize on both current and future engine shortages. Cargo airlines, especially wide-body freight operators, continue to achieve unprecedented high returns as a legacy of the pandemic-induced capacity shortages. We expect this level of cargo demand to be sustained, although macroeconomic factors have the potential to temper the rate of growth we've seen in recent years. Singapore Airlines, as one example, spoke about the recovery in cargo demand it has seen from Asia and expects yields to remain higher than pre-COVID levels in the near to medium term, as air cargo capacity remains tight on key trade lanes to and from Asia. particularly between Europe and Asia. We are virtually fully placed on our original firm order of 20 777-300 EOR freighters, and we are also seeing strong demand on the narrow-body freighter side. We recently announced a number of deals for the long-term lease of 737-800 freighters to Goal in Brazil, who will operate them on behalf of Mercado Livre, a $50 billion e-commerce business in South America, as one example. On the helicopter side, we continue to see positive momentum with leasing activity improving across all sectors. There is clear demand from operators to lock in contracts earlier as the supply picture continues to tighten. This has been driven by strong demand from oil and gas, high renewal rates in helicopter emergency medical services, and of course, limited production from the OEMs. Given AirCap's market-leading position in the global helicopter business, we've been able to take advantage of these trends and drive our returns higher. So in summary, this was another very solid quarter for AirCap, with earnings and cash flows remaining strong throughout the business. The market environment continues to improve, And as a market leader, we are well-placed to capitalize on this strong demand for both new and used aircraft and engines. Our balance sheet continues to de-lever, and we continue to maintain a strong liquidity position, despite the impact of COVID and Russia, and the business continues to generate strong and consistent earnings and cash flows for our investors. With that, I will hand the call over to Pete for a detailed review of our financial performance. Thank you all.