IB Net Payout Yields Model

Genesis Lease Finally Buys Another Plane

While the rest of the airline leasing business has been busy buying either new planes from Airbus or Boeing or working out sale/leaseback arrangemetns with cash strapped carriers, GLS has stayed on the sidelines unwilling to tap its large credit line. At least, until today. GLS announced the purchase of a new A321 and leaseback to US Air.

This is significant from a macro economic view because GLS has been on the sidelines all this time. Evidently management sees a bottom in the airplane leasing segment. Their management is widely respected for having performed well at other companies during downturns.

The PR also had a hidden announcement that GLS has all 55 aircraft leased now. This is significant because they had 2 aircraft unleased as of the last announcement and its very positive to see them fully booked during the worst economic climate in 70 years.

This acquisition now means Genesis has 55 aircraft on lease to 36 airline customers in 21 countries.

Considering they and other leasing companies with modern fleets weathered the storm rather well, the stock prices are relatively cheap. After all, they are in a similar financial position to when the stock traded in the $20s. With a largely untapped credit line, I'd expect to see GLS add some more planes in the coming months.

Disclosure: Long GLS in client and personal accounts


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