AerCap Holdings N.V. Aengus Kelly, CEO January 2017 Industry - - PowerPoint PPT Presentation

January 2017

AerCap Holdings N.V.

Aengus Kelly, CEO

Industry Update

Looking Back

(1)

IATA Passenger Analysis – RPK % traffic growth for January – November 2016

(2)

IATA December 2016

2016 looked a lot like 2015 with a backdrop of low fuel prices, strong traffic growth and an

• verall profitable year

for the industry

TOP 2016 DEVELOPMENTS

Air traffic growth in 2016 remained robust, short-haul at 5.6% and long-haul at 6.4%1

PASSENGER TRAFFIC GROWTH

Unaffected by slower than expected growth, passenger traffic in China grew steadily at 11.2% in 20161

CHINA SLOWING GDP GROWTH

Highest airline profitability in the industry’s history with $36 billion of net profit expected in 20162

HIGHER AIRLINE PROFITABILITY

New entrants attracted by stable return profile of asset class Concerns about OEM production levels and overcapacity with reduced run rates for 777 and A380 Increased M&A activity within the leasing community

ADDITIONAL CAPITAL WIDEBODY CONCERNS LESSOR CONSOLIDATION? 3 3 4

Looking Ahead

The market expected to carry on with stable growth, driven by the eighth year in a row of aggregate airline profitability

2017 OUTLOOK: STABLE GROWTH

Strong airline profitability and GDP growth forecasts bode well for aircraft demand despite some deferral announcements Availability of financing remains robust with receptive Capital Markets Consolidation and emergence

• f new investors drawn

by return profile An evolving situation – too early to assess impact Rising interest rates expected to impact lease rates and debt costs Appreciation of U.S. Dollar – an area of focus for some emerging economies

HEALTHY DEMAND FOR AIRCRAFT FURTHER M&A ACTIVITY RISING INTEREST RATES GEOPOLITICAL LANDSCAPE U.S. DOLLAR STRENGTH FINANCING ENVIRONMENT 3 4 4

Global Trends

• Airline industry profits reached

$35.6 billion in 2016 and are forecasted at $29.8 billion in 2017

• Airlines’ profitability expected to continue

to drive capacity increases

• The demand stimulus from lower oil prices

will taper off in 2017, slowing traffic growth to 5.1% (from 5.9% in 2016)

• North America: 2.5% and

Latin America: 4.0%

• Europe: 4.0%, Middle East: 9.0%,

and Africa: 4.5%

• Asia Pacific: 7.0%

Years of Industry Profitability 2017 World Traffic RPK Growth

From 5.9% in 2016

2017 Total Passengers

From 3.8B in 2016

2017 Total Net Profit

From $36B in 2016

IATA December 2016 – Actual or estimate for 2016 and forecast for 2017 for system-wide global commercial airlines

5.1% 4.0B 30B 8

Robust industry performance translating into strong aircraft demand

3 5 4

Air Travel Resilience

Air travel remains resilient in an unpredictable world

Air Traffic Growth1 (RPKs, billion per month)

China, Brexit Russian crisis, Zika

Average growth

5.5%

Ebola MERS ISIS

2007 2008 2009 2010

Turkey

2011 2012 2013 2014 2015 2016

Brazil Financial crisis Euro crisis

ACTS OF TERROR

Peak oil $147/bbl

(1)

IATA Air Passenger Analysis, total passenger market 650 600 550 500 450 400 350 300 SEASONALLY ADJUSTED

3 6 4

Middle Class Is Growing and Flying

Middle Class to move from 2.8 billion to 4.8 billion in 20 years

Middle Class (millions of people)1

776 826 848 864 861 310 441 455 911 1,738 2,602 3,528 1,000 2,000 3,000 4,000 5,000 2005

1,867

130 1995e2

1,297

2015

2,792

206 66 Emerging Countries Developing Countries Mature Countries 2035

4,830

2025

3,776

5.7 6.5 7.2 8.1 8.8

World population (billion)

23% 29% 38% 46% 55%

% of world population History Forecast

(1)

Oxford Economics, Airbus; Households with yearly income between $20,000 and $150,000 at PPP in constant 2015 prices

(2)

Estimate split for 1995 by region

3 7 4

Emerging Middle Class

The world’s emerging Middle Class lives in Asia Pacific

World Population Distribution (2016)1

(1)

United Nations, Department of Economic and Social Affairs, Population Division; Ascend Fleet Database

U.S.

324 million

• 50+ cities with over 1 million inhabitants
• 5,937 total aircraft in operation
• 1,648 total aircraft on order

CHINA

1.38 billion

• 140+ cities with over 1 million inhabitants
• 2,765 total aircraft in operation
• 530 total aircraft on order

INDIA

1.33 billion

• 50+ cities with over 1 million inhabitants
• 480 total aircraft in operation
• 696 total aircraft on order

3 8 4

Airlines Need Over 39,600 New Aircraft

Airlines and lessors are expected to receive 5 new aircraft every day for the next 20 years

Global Commercial Aircraft Fleet1

(1)

Boeing Current Market Outlook 2016 (includes regional jets) Stay in service Replacement Growth

39,620

NEW AIRCRAFT

North America 21% Latin America 8% Middle East 8% Africa 3% C.I.S. 3% Europe 19% Asia Pacific 38% 22,510 5,620 16,890 22,730

22,510 45,240

2015 2035

~3.5%

Annual Growth

3 9 4

China / India Interconnectivity

Interconnectivity between China and India is underserved

In Total Less Than 6 Flights per Day Joining 2.7 Billion People Between China and India

International City Pairs Daily Flights New York - London 31 Dublin - London 43 Paris - Berlin 11 Los Angeles – Mexico City 11 Hong Kong – Taipei 40 Jakarta - Singapore 39 Kuala Lumpur - Jakarta 22

Source: SRS Analyzer based on full year 2016 flights

3 10 4

China / India Interconnectivity

Interconnectivity between China and India is underserved

In Total Less Than 6 Flights per Day Joining 2.7 Billion People Between China and India

International City Pairs Daily Flights New York - London 31 Dublin - London 43 Paris - Berlin 11 Los Angeles – Mexico City 11 Hong Kong – Taipei 40 Jakarta - Singapore 39 Kuala Lumpur - Jakarta 22 China to India City Pairs Daily Flights Shanghai - Mumbai Beijing - Delhi < 1 Beijing - Mumbai < 1 Shanghai - Delhi 2 Kunming - Kolkata 1 Guangzhou - Delhi 2

Source: SRS Analyzer based on full year 2016 flights

3 10 4

AerCap Update

1,112 AIRCRAFT TRANSACTIONS

AerCap leased, purchased and sold 1,112 aircraft since July 20141

Where is the Aircraft Market?

183

LEASED

LEASED

753

PURCHASED

104

SOLD

255

NARROWBODY

800

WIDEBODY

312

49

PURCHASED

80

SOLD

570

LEASED

55

PURCHASED

175

SOLD

(1)

• No. of transactions from July 1, 2014 to December 31, 2016 (includes owned and managed aircraft)

3 12 4

AerCap executed 753 lease transactions for new and used aircraft since July 20141

(1)

• No. of transactions from July 1, 2014 to December 31, 2016 (includes owned and managed aircraft)

202 New Aircraft Leases 551 Used Aircraft Leases

Type # of Aircraft Airbus A320 Family 105 Airbus A350 14 Boeing 737 Family 37 Boeing 787 33 Embraer E190/195-E2 13 Type # of Aircraft Airbus A320 Family 244 Airbus A330 59 Boeing 737 Family 158 Boeing 767 22 Boeing 777 39 Other Narrowbody 13 Other Widebody 16

Lease Transactions

3 13 4

AerCap purchased 104 new aircraft and sold 255 aircraft since July 20141

(1)

• No. of transactions from July 1, 2014 to December 31, 2016 (includes owned and managed aircraft)

104 New Aircraft Purchases 255 Aircraft Sales

Type # of Aircraft Airbus A320 Family 21 Airbus A330 1 Airbus A350 10 Boeing 737 Family 34 Boeing 787 38 Type # of Aircraft Airbus A320 Family 83 Airbus A330 27 Boeing 737 Family 66 Boeing 757 21 Boeing 767 11 Boeing 777 14 Boeing 787 2 Other Narrowbody 5 Other Widebody 26

Aircraft Purchases and Sales

3 14 4

What to Watch in 2017

We expect stable growth with these key areas of focus in 2017

Strong passenger traffic Stable demand for aircraft Impact of strong U.S. Dollar Consolidation and emergence of new investors Rising interest rate environment Geopolitical changes

3 15 4

Q&A

This presentation contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are “forward-looking statements”. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “might,” “should,” “expect,” “plan,” “intend,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue” or the negatives thereof or variations thereon or similar terminology. All statements other than statements

• f historical fact included in this presentation are forward-looking statements

and are based on various underlying assumptions and expectations and are subject to known and unknown risks, uncertainties and assumptions, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future

• events. There are important factors that could cause our actual results, level of

activity performance or achievements to differ materially from the results, level

• f activity, performance or achievements expressed or implied in the forward-

looking statements. As a result, there can be no assurance that the forward- looking statements included in this presentation will prove to be accurate or

• correct. In light of these risks, uncertainties and assumptions, the future

performance or events described in the forward-looking statements in this presentation might not occur. Accordingly, you should not rely upon forward- looking statements as a prediction of actual results and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking

• statements. We do not undertake any obligation to, and will not, update any

forward-looking statements, whether as a result of new information, future events or otherwise. The information in this document is the property of AerCap Holdings N.V. and its subsidiaries and may not be copied or communicated to a fourth party, or used for any purpose other than that for which it is supplied without the express written consent of AerCap Holdings N.V. and its subsidiaries. No warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon AerCap Holdings N.V. or any of its subsidiaries or associated companies.

Disclaimer Incl. Forward Looking Statements & Safe Harbor

3 17 4

AerCap Holdings N.V. AerCap House 65 St. Stephen’s Green Dublin 2, Ireland +353 1 819 2010 contact@aercap.com

Follow us on