Willis Lease Finance Corporation (WLFC) announced record first-quarter total revenues of US$119.1 million and record quarterly pre-tax income of US$29.9 million. For the three months ended March 31, 2024, aggregate, core lease rent and maintenance reserve revenues were at an all-time high of US$96.8 million, up 26% as compared to US$76.7 million in 2023. The growth was predominantly driven by core, recurring lease and maintenance revenues associated with a strong, resurging aviation marketplace and airlines leveraging WLFC’s leasing, parts and maintenance capabilities in order to avoid protracted engine shop visits.
WLFC’s reported lease rent revenue of US$52.9 million in the first quarter of 2024 was in-line with lease rent revenue of US$53.2 million in the first quarter of 2023. During the three months ended March 31, 2024, the company purchased equipment (including capitalised costs) totalling US$62.8 million, which consisted of two aircraft and four engines and other parts and equipment purchased for its lease portfolio. During the three months ended March 31, 2023, the company purchased equipment (including capitalised costs) totalling US$55.7 million, which consisted of five engines and other parts and equipment purchased for its lease portfolio.
Maintenance reserve revenue was US$43.9 million in the first quarter of 2024, an increase of 86.7%, compared to US$23.5 million in the same quarter of 2023, reflecting the high level of usage of the company’s assets by its customer base. WLFC’s engines on lease with “non-reimbursable” usage fees generated US$37.6 million of short-term maintenance revenues in 2024, compared to US$23.5 million in the prior year. There was US$6.3 million of long-term maintenance revenue recognised in the three months ended March 31, 2024, compared to no long-term maintenance revenue recognised for the three months ended March 31, 2023. As of March 31, 2024, and March 31, 2023, there were US$26.7 million and US$13.7 million, respectively, of deferred in-substance fixed-payment use fees included in unearned revenue associated with engines on short-term leases. These deferred in-substance fixed-payment use fees represent portfolio utilisation beyond the maintenance reserve revenues reflected in the company’s unaudited consolidated statements of income.
Spare parts and equipment sales decreased to US$3.3 million in the first quarter of 2024, compared to US$5.1 million in the first quarter of 2023. The decrease in spare parts sales for the three months ended March 31, 2024, reflects variations in the timing of sales.
Gain on sale of leased equipment was US$9.2 million in the first quarter of 2024, reflecting the sale of eight engines. Loss on sale of leased equipment was US$0.1 million in the first quarter of 2023, reflecting the sale of two engines. The company is experiencing a strong market for engine sales.
WLFC generated a quarterly record of US$29.9 million of pre-tax income in the first quarter of 2024, compared to the pre-tax income of US$6.8 million in the first quarter of 2023.
