Lessors report surprisingly strong results

There was a lot of news out of the lessor community in the last week. GE and CIT reported their 2008 financial results. GE's Aviation segment reported surprisingly strong results despite what corporate executives described as a "terrible credit environment." Aviation reported a 14% increase in profits last year to $3.68bn.

GECAS’ full year revenues were up slightly, 1% to $4.9bn, while profits were down 1% to $1.19bn. Also, the lessor is reportedly in the process of retrieving its fourth Airbus A320 from Kingfisher Airlines due to delays in lease rental payments and maintenance reserves.

CIT Group's transportation finance unit reported increased revenue to $961.5 million compared with $911.9 million in 2007. Net income was $326.1 million, a whopping 34% margin, vs. $271 million.

Meanwhile, Standard & Poor's Ratings Services revised its ratings on International Lease Finance (ILFC) by lowering the long-term corporate credit rating to 'BBB+' from 'A-', and lowering the short-term corporate credit rating to 'A-2' from 'A-1'. A potential concern resulting from the downgrade of ILFC's short-term rating to'A-2' will be its lack of access to the federal commercial paper funding facility (CPFF).

Following in the footsteps of the three publicly-traded lessors that pay dividends, Babcock & Brown Air cut its quarterly dividend by 60% in a move to help save cash.

Source: Commercial Aviation Online