Air Lease Corp (AL), Fly Leasing Ltd(ADR) (FLY): Gliding Higher With AerCap Holdings N.V. (AER)

Global travel growth

The International Air Transport Association (IATA) released statistics showing that air travel demand jumped 5% in July. The demand growth was lead by a 5.5% uptick in emerging markets.

The report is interesting in that it shows international traffic growing the most, as businesses and consumers continue to desire to connect on a global scale. The biggest growth remains in the domestic Chinese and Russian markets where traffic climbed over 10% compared to last July. This growth rate only leads to higher demand for airplanes and right into the wheelhouse of AerCap Holdings N.V. (NYSE:AER). Emerging markets provide some of the largest customers for the airplane lessors.

Bottom line

The business continues to glide higher with consistent leasing fees and cash flow. The market perceives a volatile business that doesn’t exist. With global demand for air travel growing at a 5% clip, the biggest risk to the sector of broken leases can typically be over come via signing up a new customer. After all, the demand for the air travel doesn’t disappear if one airline goes out of business; instead it shifts to a stronger airline that will need more airplanes. Shareholders of AerCap will continue to benefit from the global demand for air travel and the consistent long-term lease payments.

The article Gliding Higher With AerCap Holdings originally appeared on Fool.com and is written by Mark Holder.

Mark Holder and Stone Fox Capital Advisors owns shares of AerCap Holdings N.V. (NYSE:AER). The Motley Fool has no position in any of the stocks mentioned.

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