Model the business · NYSE: AER

AerCap: an aircraft lessor that earns a spread on its fleet

Chocked between two airlines. The aircraft is chocked at the stand between one airline and the next, and its light comes on as it is readied to go out again.

AerCap owns 1,501 aircraft carried at $57.8bn, and the question is how wide the gap between their rent and the cost of its debt stays.

By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.

On this subject: the AerCap Holdings N.V. case.Updated 4 November 2026

Latest filing 12 February 2026 · Information to 12 February 2026

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Flight equipment held for operating leases, 31 December 2025Filing: $57,796.3m; Net book value of the owned fleet on lease.
Lease yield, FY2025ADerived: 11.5%; Basic rents over average book value.
Net spread, FY2025ADerived: 7.0%; The yield less interest over average debt.
Book value per share, 31 December 2025Filing: $112.59

How to read the figures

Every figure on this page is a cell in the AerCap operating model, and each carries one of four tags.

Filing what the company filed, with its tag
Derived arithmetic on filed figures, such as a proxy or a residual
Assumption a judgement of this page, never the company’s
Model what the model computes from the three

The business

AerCap buys aircraft, engines and helicopters and leases them to airlines and operators, mostly for years at a fixed rent, then leases them again or sells them. At the end of 2025 it owned 1,501 aircraft, 1,457 of them on lease, managed 148 more and had 283 new aircraft on order; the owned fleet’s average age by book value was 7.3 years. It files its annual report with the SEC on Form 20-F under US GAAP.

Its revenue is rent: $7,369.5m of lease revenue in 2025, from $6,860.3m in 2023. On top of it sit gains on aircraft sold, $819.5m in 2025, and, in 2023 and 2025, large recoveries from insurers for aircraft lost in Russia in 2022. Its main costs are depreciation, $2,647.2m, and interest, $1,981.9m.

Three kinds of number, and a recovery

The model keeps what AerCap filed apart from what follows from it and from what the page assumes. The lease yield and the net spread are this page’s arithmetic; AerCap’s adjusted leverage, average cost of debt and book value per share are its own measures, rebuilt from the GAAP lines and tied to what it prints. The Ukraine recoveries are filed as a negative expense and stay so, with pre-tax income without them shown beside.

FY2025, and what kind of number each is
Measure	Figure	Kind
Basic lease rents	$6,679.5m	Reported
Maintenance rents and other receipts	$690.0m	Reported: mostly lessees’ maintenance money, released
Net recoveries related to Ukraine Conflict	$1,490.4m	Reported, as a negative expense
Pre-tax income	$4,092.0m	Reported
Pre-tax income without the recoveries	$2,601.6m	Derived
Lease yield	11.48%	Derived: basic rents / average book value
Average cost of debt	4.1%	Company measure, rebuilt
Book value per share	$112.59	Company measure, rebuilt

The spread, and the leverage on it

A lessor earns a spread. Basic rents were 11.48% of the fleet’s average book value in 2025 and interest 4.46% of average debt, a spread of 7.02%, after 6.69% in 2024 and 7.24% in 2023. Leasing expenses, overheads and tax take most of it; debt of 2.38 times equity at the end of 2025 is what turns the rest into a return on equity. AerCap’s results releases quote a net spread of their own, defined differently, which is not used here.

Selling aircraft, and book value

AerCap sold 108 owned aircraft in 2025, average age 15 years, and made $819.5m of gains on sales, about 29% of the book value that left the fleet. Those gains are the gap between what buyers paid and depreciated cost; they last while market values stay above it. Book value per share, AerCap’s own measure, was $112.59 at the end of 2025, after $94.57 and $83.81, as share repurchases, with tax withholdings on share awards $2,538.2m in 2025, shrank the share count faster than the equity.

One lease, from both sides

A separate module works one invented lease, a new narrowbody at $50m on ten years at 0.75% of its price a month, from the lessor’s side and the airline’s. The lessor depreciates the aircraft, borrows against it and sells it at the end; the airline books the same rent as a lease liability and a right-of-use asset under IFRS 16, or as a single straight-line cost under ASC 842. The contract is hypothetical: AerCap is not a party to it and neither is any airline. The generic aircraft leasing and airline models build each side in full.

The forecast, and what the value is not

The model keeps three kinds of number on three sheets. Reported holds only what AerCap filed, each row with its tag or the statement that it is untagged. Derived holds arithmetic on Reported alone: the yield, the spread, the rebuilt measures. Forecast holds the assumptions in three cases, every row an editorial judgement of this page and none of it AerCap’s guidance.

In the base case the yield eases to 11.4% and the cost of debt rises to 4.6%, so the spread is 6.8% in every forecast year and the return on equity about 10.5% at 2.4 times leverage, without recoveries. Book equity plus the residual income above a 10% cost of equity gives $119.53 a share against book value of $112.59 ($49.26 in the downside, $163.78 in the upside). These are what the inputs imply, not a target, a fair value or a recommendation, and the value is never compared with the share price.

The base case, filed to FY2025A and forecast to FY2030E

Total lease revenue
Pre-tax income (the company’s measure)
Basic lease rents less interest expense (this page’s measure)
Forecast years: lighter bars, dashed lines

Read as a table

	FY2023A (filed)	FY2024A (filed)	FY2025A (filed)	FY2026E	FY2027E	FY2028E	FY2029E	FY2030E
Total lease revenue	$6,860m	$7,004m	$7,369m	$7,274m	$7,327m	$7,380m	$7,434m	$7,488m
Pre-tax income (the company’s measure)	$3,272m	$2,263m	$4,092m	$2,043m	$2,036m	$2,030m	$2,024m	$2,017m
Basic lease rents less interest expense (this page’s measure)	$4,443m	$4,386m	$4,698m	$4,599m	$4,631m	$4,665m	$4,700m	$4,735m

Change the case or an assumption in Explore; the filed years never move.

CaseBase caseLoading the formulas for your account.

Lease yield against the cost of debt: the spread

Basic rents as a yield on the fleet, interest as a cost on the debt that funds it, and the spread between them, with AerCap’s own average cost of debt marked in the filed years.

Lease yield
Cost of debt: interest expense / average debt
Net spread
AerCap’s average cost of debt, as filed
Forecast years: lighter bars, dashed lines

Read as a table

	FY2023A (filed)	FY2024A (filed)	FY2025A (filed)	FY2026E	FY2027E	FY2028E	FY2029E	FY2030E
Lease yield	11.13%	11.03%	11.48%	11.40%	11.40%	11.40%	11.40%	11.40%
Cost of debt: interest expense / average debt	3.88%	4.34%	4.46%	4.60%	4.60%	4.60%	4.60%	4.60%
Net spread	7.24%	6.69%	7.02%	6.80%	6.80%	6.80%	6.80%	6.80%
AerCap’s average cost of debt, as filed	3.5%	4.0%	4.1%	n.a.	n.a.	n.a.	n.a.	n.a.

Filed: basic rents, interest expense, debt and AerCap’s own average cost of debt, FY2023A to FY2025A.
Derived: the yield, interest over average debt and the spread; AerCap’s results releases define a net spread of their own, not used.
Assumption: the yield, the cost of debt and leverage from FY2026E. Model: the forecast spread.

Net spread, FY2025ADerived: 7.0%; Lease yield less interest over average debt: this page’s measure.
Interest expense / average debt, FY2025ADerived: 4.5%; GAAP interest, mark-to-market and issuance costs in it.
AerCap’s average cost of debt, FY2025AFiling: 4.1%; Its own measure, which strips those out.
Basic rents less interest expense, FY2025ADerived: $4,697.5m
Net spread, FY2030EModel: 6.8%; The selected case.

CaseBase caseLoading the formulas for your account.

Step 1 of 6

The filed income statement: rent, gains and a recovery

By the end of this step: type the income statement from the 20-F, prove its lines add up, and set the Ukraine recoveries apart.

AerCap’s revenue is mostly rent. In 2025 basic lease rents were $6,679.5m and maintenance rents and other receipts $690.0m, together $7,369.5m of lease revenue; net gains on selling aircraft added $819.5m and other income $327.7m, for total revenues and other income of $8,516.7m. The lines are typed on the Reported sheet with their tags; the two lease revenue lines are one standard tag on two members.

Among the expenses sits a negative line: net recoveries related to the Ukraine conflict, $1,490.4m in 2025 and $1,288.0m in 2023, insurance and court settlements for aircraft lost in Russia in 2022. They are filed figures and stay as filed, but they are not rent: pre-tax income of $4,092.0m in 2025 was $2,601.6m without them, a Derived line.

Reported rows 6 to 26Open the whole workbook

$m	FY2023A	FY2024A	FY2025A
Basic lease rents	6,249.0	6,377.2	6,679.5
Maintenance rents and other receipts	611.3	626.8	690.0
Total lease revenue	6,860.3	7,004.0	7,369.5
Net gain on sale of assets	489.6	651.1	819.5
Other income	230.5	341.5	327.7
Total revenues and other income	7,580.4	7,996.6	8,516.7
Depreciation and amortisation	2,480.6	2,580.0	2,647.2
Net (recoveries) charges related to Ukraine Conflict	(1,288.0)	(194.8)	(1,490.4)
Asset impairment	86.9	49.8	100.8
Interest expense	1,806.4	1,990.7	1,981.9
Loss on debt extinguishment	4.1	13.5	4.9
Leasing expenses	756.4	810.4	647.6
Selling, general and administrative expenses	464.1	488.9	545.9
Total expenses	4,310.6	5,738.5	4,437.9
Gain on investments at fair value	2.3	5.2	13.3
Income before income taxes and income of investments under the equity method	3,272.2	2,263.4	4,092.0
Income tax expense	291.1	323.7	555.2
Equity in net earnings of investments under the equity method	166.7	159.0	213.8
Net income	3,147.8	2,098.6	3,750.6
Net income (loss) attributable to non-controlling interest	11.8	-	-
Net income attributable to AerCap Holdings N.V.	3,136.1	2,098.6	3,750.6

Reported: what the filings say Filing

Each figure with its period, its XBRL tag where it has one, and the filing it comes from. No guidance, estimate or press report is a model input.

Lease revenueFY2025: Basic lease rents $6,679.5m and maintenance rents and other receipts $690.0m, total $7,369.5m (from $7,004.0m)us-gaap:OperatingLeaseLeaseIncome [k25, xbrl]
Gains and other incomeFY2025: Net gain on sale of assets $819.5m; other income $327.7m; total revenues and other income $8,516.7mus-gaap:GainLossOnSaleOfPropertyPlantEquipment [k25, xbrl]
Depreciation, interest and costsFY2025: D&A $2,647.2m; interest expense $1,981.9m; leasing expenses $647.6m; SG&A $545.9m; impairment $100.8mus-gaap:InterestExpenseOperating [k25, xbrl]
Ukraine recoveriesFY2023 to FY2025: $1,490.4m in 2025, $194.8m in 2024 and $1,288.0m in 2023, filed as a negative expenseaer:NetChargesRecoveriesRelatedToUkraineConflict [k25]
EarningsFY2025: Pre-tax income $4,092.0m; net income attributable to AerCap $3,750.6m; diluted earnings per share $21.30us-gaap:NetIncomeLoss [k25, xbrl]
The fleet at book value31 December 2025: Flight equipment held for operating leases $57,796.3m (from $58,575.7m): additions $5,431.4m, depreciation $2,613.5m, disposals and transfers to held for sale $2,838.1mus-gaap:PropertyPlantAndEquipmentNet [k25, xbrl]
The fleet in aircraft31 December 2025: 1,501 owned, 1,457 of them on lease, average age 7.3 years by book value, 283 on order [k25]
Debt and equity31 December 2025: Debt $43,565.3m; total equity $18,323.5m; principal $43,806.3m, of which $6,219.8m due in 2026 and $13,979.1m after 2030us-gaap:LongTermDebt [k25, xbrl]
Rent contracted on leases in place31 December 2025: $43,108.3m undiscounted, $6,599.7m of it in 2026us-gaap:LessorOperatingLeasePaymentsToBeReceived [k25, xbrl]
AerCap’s own measuresFY2023 to FY2025: Adjusted debt to equity 2.11 to 1 (2.35, 2.47); average cost of debt 4.1% (4.0%, 3.5%); book value per share $112.59 ($94.57, $83.81) [k25, k24]
Capital returnedFY2025: Share repurchases and withholdings $2,538.2m and dividends $192.4mus-gaap:PaymentsOfDividendsCommonStock [k25, xbrl]
Earlier balances31 December 2022: Net book value $55,220.8m, debt $46,533.0m and total equity $16,195.1m at 31 December 2022, the opening balances for 2023us-gaap:PropertyPlantAndEquipmentNet [k23, k25, xbrl]

Derived: by arithmetic Derived

Each is computed from the reported figures and nothing else. The method is the row on the Derived sheet.

Lease yield. Basic lease rents over the mean of the year-end net book values: 11.48% in 2025, 11.03% in 2024, 11.13% in 2023. An accounting ratio, not a lease rate.
Cost of debt. Interest expense over the mean of the year-end debt: 4.46%, 4.34% and 3.88%.
Net spread. The lease yield less the cost of debt: 7.02% in 2025, 6.69% in 2024, 7.24% in 2023; 7.38% against AerCap’s own 4.1% cost of debt.
Depreciation rate. Depreciation of flight equipment over average book value: 4.49%, 4.41% and 4.36%.
Gain on sale over book value sold. Net gain on sale over the book value disposed of and moved to held for sale: 28.9%, 29.5% and 26.1%, approximate because the two differ in timing.
Pre-tax income without the recoveries. Pre-tax income plus the recoveries line, which is negative: $2,601.6m in 2025, $2,068.6m in 2024, $1,984.2m in 2023.
Book leverage. Debt over total equity: 2.38x at the end of 2025, 2.64x and 2.80x before.
Adjusted debt to equity rebuilt. Debt less cash less $1,125m of equity credit, over total equity plus that credit: $41,061.1m over $19,448.5m, 2.11, the figure printed.
Average cost of debt rebuilt. Interest expense less mark-to-market and issuance costs, $1,850.9m against the $1,851m printed, and the printed interest over the printed average debt, 4.07%, which rounds to 4.1%.
Book value per share rebuilt. Shareholders’ equity over shares outstanding less unvested restricted stock: $18,323.3m over 162.74m, $112.59.
Return on equity. Net income over average total equity: 21.1% in 2025 with the recoveries in it; pre-tax income without them over the same equity, 14.7%.
Contracted rent per dollar of debt. Rent to be received on leases in place over debt principal: 0.98x, undiscounted, before the cost of running the fleet and before interest.

Assumed: the forecast Assumption

Judgements of this page, in three cases, with the reason for each. None is the company’s guidance.

Assumption	Base	Downside	Upside
Additions to the fleet, % of opening book valueDerived: 11.7%, 11.5% and 9.3% (2023 to 2025). 283 aircraft were on order at the end of 2025; the order book is not modelled aircraft by aircraft.	10%	7%	12%
Lease yield: basic rents / average book valueDerived: 11.13%, 11.03%, 11.48%. Lease rates rose while new aircraft were scarce; the downside has them fall back.	11.4%	10.8%	11.8%
Net gain on sale, % of book value soldDerived, approximately: 26.1%, 29.5%, 28.9%. Gains last while market values exceed depreciated cost.	22%	10%	28%
Leasing expenses, % of lease revenueDerived: 11.0%, 11.6%, 8.8%. Airline defaults and restructurings move it most.	10%	12.5%	9%
Cost of debt: interest / average debtDerived: 3.88%, 4.34%, 4.46% on GAAP interest; AerCap’s own 3.5%, 4.0%, 4.1%. Older fixed-rate debt refinances at today’s rates.	4.6%	5.3%	4.3%
In every case: the fleetDerived: sales 3.4% to 4.8%, depreciation 4.36% to 4.49% and impairment 0.09% to 0.17% of book value in 2023 to 2025.	Sales 4.5% of opening book value; depreciation 4.5%; impairment 0.15%	Same	Same
In every case: other linesFiled ranges, 2023 to 2025. What is left of the Ukraine claims is not forecast.	Maintenance rents 10% of basic rents; other income $300m; equity earnings $200m; SG&A +4% a year; tax 13%; no further recoveries	Same	Same
In every case: funding and valueBook leverage 2.38x at the end of 2025. The cost of equity is a judgement; no market figure enters.	Debt / equity 2.4x; cost of equity 10%; growth after 2030 2%	Same	Same
The hypothetical lease (not a forecast of anything)Invented for the One Lease module. AerCap and no airline are party to it.	$50m; 0.75% a month for ten years; 75% borrowed at 5%; residual 62%; three idle months; 15% less fuel	Same	Same

Filings

Every reported figure comes from one of these.

k25FilingForm 20-F for the fiscal year ended December 31, 2025 · AerCap Holdings N.V., filed with the SEC, 12 February 2026
k24FilingForm 20-F for the fiscal year ended December 31, 2024 · AerCap Holdings N.V., filed with the SEC, 26 February 2025
k23FilingForm 20-F for the fiscal year ended December 31, 2023 · AerCap Holdings N.V., filed with the SEC, 23 February 2024
xbrlDataXBRL company facts, CIK 0001378789 · U.S. Securities and Exchange Commission, 12 February 2026
edgarDataAerCap Holdings N.V. filings on EDGAR · U.S. Securities and Exchange Commission, 12 February 2026

What to keep in mind

Where the filings’ definitions bend, and what the model leaves out.

The lease yield divides basic rents, which include about $156m of finance lease interest in 2025, by the book value of operating lease equipment alone, and uses the mean of two year ends; it is an accounting ratio, not a lease rate on market value.
The cost of debt on the GAAP line includes mark-to-market on derivatives and issuance costs, and averages two year ends; AerCap’s own average cost of debt strips both and averages differently. Interest capitalised on prepayments ($146m in 2025) is in neither.
Gains on sale are set against the book value that left the fleet in the same year, some of it still held for sale at the year end, and include engines and parts; the ratio is approximate.
The tax on the Ukraine recoveries is not disclosed, so earnings without them are shown before tax only. No further recovery is forecast.
The forecast does not model the order book aircraft by aircraft, lease expiries, lessee credit, or the market value of the fleet; additions, sales and the yield are shares of book value.
Other assets and liabilities, including maintenance reserves, deposits and deferred tax, are held at their 31 December 2025 level, and leverage is held at a chosen ratio; capital returned is what that leaves, not a forecast of repurchases or dividends.
The residual income value uses total equity, non-controlling interest of $0.2m in it, and the shares at 31 December 2025; it is not a target, a fair value or a recommendation.
AerCap’s 2026 quarterly reports (Forms 6-K) are after the information cut-off of 12 February 2026 and are not used; neither is any guidance or the net spread its results releases define.
The One Lease module is invented, in yearly totals, with rent discounted as if paid at each year end; a monthly schedule paid in advance gives a slightly different liability.

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The method behind the case

Aircraft leasing modelModel · a template this one descends from
Airline operating and valuation modelModel · a template this one descends from
IRR by Eye Lab · about 3 min
Covenant Headroom Lab · about 10 min
Project Finance Modelling: Cash Flow Waterfalls, DSCR Sizing and the Debt Sculpt Guide · 12 min
Credit and Covenant Modelling: What a Lender Actually Tests Guide · 11 min
Financial Modelling Best Practices: The Conventions That Make a Model Auditable Guide · 11 min

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