Executive Summary

Q2 2026 delivered $227.510M total revenue and $57.233M net income, aided by $56M insurance settlements and tempered by $31.153M impairment tied to customer bankruptcies; lease rental revenue rose 17% YoY .
Liquidity remained robust at ~$2.5B; debt issuance of $650M at 5.000% and investment‑grade upgrades by S&P (BBB) and Moody’s (Baa2) strengthen funding flexibility .
Fleet mix continued transitioning to new technology narrow‑body aircraft (50% of NBV), with 100% of the fleet on lease and utilization at ~99.7% .
No numeric guidance provided; catalysts were ratings upgrades, insurance recoveries, and continued portfolio youthening; estimate comparison unavailable on S&P Global for AYR.

What Went Well and What Went Wrong

What Went Well
- Lease rental revenue +17% YoY; management emphasized “favorable lease rates” and scaling on new tech aircraft: “Half of our fleet NBV is now composed of new technology narrow‑body aircraft” .
- Insurance settlements of $56M booked in other income boosted earnings: “we recognized an additional $56,000,000… from Russia related insurance settlements” .
- Credit profile improvement and efficient financing: $650M notes at 5.000% and ratings upgrades to BBB/Baa2 support capital access and growth .
What Went Wrong
- Impairment expense spiked to $31.153M, primarily due to customers’ Chapter 11 filings, which lifted operating costs 26% YoY in Q2 .
- Maintenance revenue declined YoY (Q2 $9.708M vs $19.378M prior year), consistent with fewer transitions; management reiterates maintenance is not a profit center .
- Spirit exposure adds repositioning risk: five aircraft rejected; possible engine shop visits could delay redeployment; likely placements include non‑US markets .

Financial Results

Metric	Q4 2025	Q1 2026	Q2 2026
Total Revenues ($USD Millions)	$205.558	$260.000	$227.510
Net Income ($USD Millions)	$60.778	$49.000	$57.233
EBITDA ($USD Millions)	$222.485	$223.899	$231.265
Adjusted EBITDA ($USD Millions)	$222.485	$231.938	$262.418
Gain on Sale/Disposition ($USD Millions)	$20.282	$30.000	$23.889
Impairment of Flight Equipment ($USD Millions)	$0.000	$5.066	$31.153
Net Income Margin %	29.57%*	18.97%*	25.16%*

Notes: Net Income Margin % marked with an asterisk are values retrieved from S&P Global.

Actual vs S&P Global Consensus (Q2 2026):

Revenue: Actual $227.510M; Consensus unavailable (S&P Global did not return a consensus for AYR) .
EPS: Consensus unavailable; AYR does not present EPS in filings; S&P Global records unavailable.

Segment breakdown: AYR reports as a single aircraft leasing operation (no segment table provided in filings).

Key KPIs

KPI	Q4 2025	Q1 2026	Q2 2026
Owned Aircraft (count)	265	272	270
Managed Aircraft (count/NBV)	8 / $244M	—	8 / $238M
Fleet NBV ($USD Billions)	$7.902	$8.1	$8.470
New Technology Fleet (% of NBV)	45%	46%	50%
Unencumbered Aircraft (count)	244	— (99% unencumbered, $8.0B)	266
Wtd Avg Age (years)	9.1	8.9	8.6
Wtd Avg Remaining Lease Term (years)	5.4	—	5.7
Fleet Utilization (weighted avg, %)	99.3% (Q4)	>99%	99.7%
Total Liquidity ($USD Billions)	$2.7	$2.6	$2.5
Adjusted Net Debt/Equity (x)	2.1x	2.2x	2.2x
Unsecured Debt (%)	90%	98%	98%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q2 2026	Not provided	Not provided	Maintained (no guidance)
Margins (EBITDA/Net Income)	FY/Q2 2026	Not provided	Not provided	Maintained (no guidance)
OpEx/Impairment	FY/Q2 2026	Not provided	Commentary: higher due to customer bankruptcies	Informational (no formal guidance)
OI&E (Other Income)	FY/Q2 2026	Not provided	Insurance settlements $56M in Q2	Informational
Tax Rate	FY/Q2 2026	Not provided	Not provided	Maintained (no guidance)
Capital Markets	FY/Q2 2026	N/A	$650M notes at 5.000%	New financing
Dividends	FY/Q2 2026	Preference dividends ongoing	$10.5M preference dividends in Q2	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2025, Q1 2026)	Current Period (Q2 2026)	Trend
Tariffs/Macro	Heightened vigilance; airlines monitoring consumer sentiment	Macro backdrop stable fuel prices; strong global RPK growth per IATA; softening U.S. domestic	Monitoring to cautiously constructive
OEM production shortages	Ongoing shortfalls; extend utility of current tech	Airbus/Boeing output still below targets; MAX production potentially rising; midlife values elevated	Persistent supply constraints
Ratings/Capital Markets	Positive outlooks; $500M at 5.25%	Upgrades (S&P BBB, Moody’s Baa2); $650M notes at 5.000%	Improving credit profile
M&A/Industry consolidation	Not highlighted	Discussed strategic scale benefits; order book optionality	Rising focus
Spirit Airlines/Legal	Not highlighted	5 aircraft rejected; maintenance payer issues; redeployment path likely outside U.S.	New risk item
Engine management strategy	Discussed greater engine leasing focus	Reinforced as advantage amid engine challenges	Strategic emphasis increasing
Regional trends	Europe/APAC strength; cautious North America	Asia Pacific strongest international growth; historic high load factors; Latin America/The Middle East strong	Broad-based demand, U.S. softening

Management Commentary

CEO: “In the second quarter, we invested a half billion in aircraft acquisitions while earning $57 million in net income… Half of our fleet NBV is now composed of new technology narrow‑body aircraft” .
CEO on ratings/financing: “The upgrades we've recently received from S&P and Moody's… bolstered the successful issuance of $650 million unsecured senior notes at 5.000%” .
CFO: “The 26% increase… in operating cost… was primarily the result of impairments related to customers announcing their filing of Chapter 11 bankruptcy protection… we also recognized $56,000,000… from insurance settlements related to Russia based aircraft” .
CEO on consolidation: “We will continue to look at opportunities… benefits of scale… access to capital markets… manage more assets… expanding OEM interactions” .

Q&A Highlights

Industry consolidation: Management sees benefits from scale (capital markets liquidity, asset management, OEM engagement) but will be selective; existing plan focuses on ROE improvement .
Spirit Airlines process: Five aircraft rejected; some assets may need shop visits; many may redeploy outside the U.S.; discussions ongoing .
Competitive dynamics: Despite higher competition and some peers’ lower funding costs, AYR emphasizes relationship sourcing and disciplined returns (e.g., United PLBs) .
Engine strategy: Increased focus on engine leasing and optimizing value across airframe/engine components under current market conditions .

Estimates Context

S&P Global consensus data for AYR was unavailable for Q2 2026 (Revenue/EPS consensus not returned); as a result, we cannot assess beat/miss versus Street for this quarter using S&P consensus. Actuals: revenue $227.510M, net income $57.233M .
Where estimates are unavailable, buyside should focus on underlying drivers (lease rate strength, insurance/other income, impairment cadence) and credit metrics (liquidity, unencumbered assets, unsecured mix) to calibrate expectations for funding costs and portfolio earnings.

Key Takeaways for Investors

Earnings quality mixed: strong lease rental revenue and insurance recoveries offset by elevated impairments tied to bankruptcies; watch impairment normalization and maintenance payer behavior .
Credit catalysts: Investment‑grade upgrades (BBB/Baa2) and $650M notes at 5.000% lower funding risk and support accretive portfolio growth .
Portfolio evolution: Continued youthening/new tech bias (50% NBV) plus 100% on‑lease with high utilization underpin recurring cash flows; redeployment risk manageable given broad demand .
Macro/engine backdrop: OEM shortfalls and engine constraints sustain midlife values and lease rates; AYR’s engine management strategy is a differentiator .
Spirit resolution: Expect staggered redeployments and potential timing frictions (shop visits); likely non‑U.S. placements—monitor transition costs and income timing .
Capital allocation: Robust liquidity ($2.5B), 98% unsecured debt, 99% unencumbered fleet afford flexibility to pursue PLBs/sales; maintain discipline on returns .
Near‑term trading: Bond spreads may tighten on ratings momentum and stable fundamentals; equity‑like exposure is limited (AYR filings reflect a private structure), so focus on credit instruments and counterparties.

Values marked with an asterisk are retrieved from S&P Global.

Aircastle LTD (AYR)·Q2 2026 Earnings Summary