Air Lease Corporation (NYSE:AL)(AL - $30.21 – NYSE) is one of the leading aircraft leasing companies purchasing new commercial aircraft directly from manufacturers and leasing those aircraft to airlines worldwide at attractive returns on equity. e stock has acted poorly during the quarter due to investor concerns regarding the impact of higher interest rates on the company’s leasing spreads as well as its exposure to emerging markets. e long lead times in ordering commercial aircraft o set these issues, as Air Lease does not lock in the lease rate until it delivers the plane and it is very easy to place planes from order termination or early lease termination given the high demand. ere were a few emerging market airlines that led for bankruptcy and the aircraft lessors easily re-leased these aircraft given the increasing demand for air travel from the growing middle class.
From Keeley Funds' Mid-Cap Value Fund fourth-quarter 2018 commentary.
