By Aishwarya Nair
(Reuters) -Air Lease Corp on Thursday reported a better-than-expected quarterly profit as a shortage of jets due to delays in deliveries from Boeing (NYSE:BA) Co and Airbus boosted demand for the lessor's planes. A stretched supply chain and an acute labor shortage has stymied Boeing and Airbus' ability to stick to their delivery schedule, leaving carriers to turn to Air Lease (NYSE:AL) for its new and young-used aircraft. While delays are also a headache for the Los Angeles-based leasing giant, which has a $28 billion order backlog with the planemakers, it has boosted lease rates of its existing fleet. Air Lease said it would examine progress payments that the company makes to Boeing and Airbus as deliveries of aircraft get delayed. Boeing declined to comment when asked about Air Lease's move.
"We continue to experience delays of several months on our Airbus narrow-body deliveries and 737 MAXs also continued to be delayed as well," said Air Lease Chief Executive John Plueger.
He warned the supply challenges will likely extend to the next couple of years, which would likely further exacerbate the current shortage of jets.
Both Airbus and Boeing typically sell planes to leasing companies to stay afloat when economic concerns deter airlines from purchasing.
Meanwhile, the leasing giant said it has submitted insurance claims for its jets stranded in Russia, for which it booked charges of about $800 million in April.
Shares of the company jumped 1.12% in extended trade, after an increase in international passenger traffic flooded its order book and boosted earnings.
It reported net profit of $105.9 million, or 95 cents per share, in the three months ended June 30, ahead of analysts' estimate of 94 cents per share, according to Refinitiv IBES.
Revenue rose 13.4% to $557.7 million in the quarter, topping estimates of $544.8 million.