Genesis Lease Limited operates as a commercial aircraft leasing company. It acquires and leases passenger and cargo jet aircraft under long-term contracts to airlines worldwide. The company leverages the platform of General Electric Commercial Aviation Services Limited to service its portfolio of leases.
John McMahon, Chief Executive Officer of Genesis, said, “When developing our business strategy, we were very conscious of the fact that air transportation’s long history of growth and strong future prospects is allied to cyclicality and is inextricably linked to the broader economic environment. The first quarter of 2008 has seen continuing turbulence in the financial markets, reduced global economic growth expectations and record high oil prices. This has resulted in a number of airline bankruptcies, mainly in the US. Although not immune to these developments, our business strategy is structured to deal with such challenges. First, we focus on young, fuel-efficient, new-generation aircraft that remain in high demand. Second, we have a well diversified customer base, with limited exposure to any single customer or geographic region. Third, we maintain a portfolio of staggered lease contract maturities stretching out to 2019 that gives us tremendous visibility into our future cash flows. Fourth, we are uniquely positioned to leverage the worldwide platform of GE Commercial Aviation Services, who service our leases, allowing us to focus on growing the business. Finally, we are financially disciplined with no refinancing obligations for at least the next couple of years, no unfunded contractual commitments and funding capacity of more than $750 million to support continued growth of the business.”
Mr. McMahon added, “Demand and lease rates for the type of aircraft that we are focused on remains strong. Furthermore, we believe that the current economic outlook may actually result in more attractive aircraft acquisition opportunities for Genesis than were available last year.”
Mr. McMahon concluded, “Apart from the two aircraft formerly leased to Aloha Airlines, all of our aircraft with lease maturities in 2008 and 2009 have been re-contracted for lease terms averaging 82 months, at lease rentals that, in aggregate, are 9% higher than the previously contracted levels. The Aloha aircraft have already been returned and we are confident that these highly desirable, Boeing 737 Next Generation models will be re-leased in a timely fashion, at attractive lease rates.”
May 7, 2008: GLS approved a $0.47 per Share dividend payable June 16 to shareholders of record as of the close of business on May 21, 2008.
June 12, 2008 (News) GLS announced that it has reached a definitive agreement to lease two Boeing 737-700 aircraft to VRG Linhas Aereas S.A (Varig), a wholly-owned subsidiary of GOL Airlines in Brazil, for a period of seven years. The two aircraft were previously on lease to Aloha Airlines. The airline is expected to take delivery of the aircraft prior to the end of July 2008. Terms of the two new leases were not disclosed.
Commenting on the transaction, John McMahon, chief executive officer of Genesis Lease said, ``The speed with which we were able to re-lease these aircraft is a good example of the global market's continued strong appetite for latest generation fuel efficient aircraft and the strength of Genesis's business model. Following Aloha's bankruptcy filing; we took possession of the aircraft and secured attractive long-term lease agreements at rates in excess of the previous contracts. In a high priced fuel environment, airlines are increasingly focused on the attraction of modern fuel efficient aircraft. With its globally diversified portfolio of predominantly young, latest generation aircraft, Genesis is well-positioned to capitalize on this.''
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