I’ve been looking at companies in the airline industry looking for potential bargains among the depressed stocks. This is especially true now as developments in the coronavirus situation slowly point towards a return to normalcy. Out of all the stocks in the industry, I am most bullish on AerCap Holdings (AER). Below, I walk you through my investment thesis.
Just a brief business overview on AerCap. It one of the largest airplane leasing companies in the world. Its business model effectively works similarly to a financing company. AerCap uses its scale to acquire aircraft at discounted prices, funds this using lower-cost debt then turns around and leases the aircraft to airlines all over the world.
AerCap owns 931 aircraft which it offers for lease. The company’s fleet is relatively young with an average age of 6.4 years. Given the number of flights canceled this year, its aircraft probably didn’t suffer