Aircastle Limited (NYSE:AYR) isn’t your everyday airline stock. The company leases almost 150 commercial and passenger airlines worldwide — and by leasing airplanes to others, it doesn’t have to deal with the direct impact of ticketing and baggage prices, fuel costs or freight rates. Clients include Air Canada (PINK:AIDIF), Emirates and South African Airways, just to name a few.
A secular recovery in the economy continues to result in more leasing demand for Aircastle. In February, AYR reported a 99% utilization rate for its most recent quarter, with lease rental revenue up 13%. That was the eight consecutive quarter of top-line growth. Furthermore, fiscal 2013 will boast the company’s largest earnings per share total since before the Great Recession.
In addition to the growth potential, income opportunity is very robust here. Last quarter, Aircastle increased its payout 10%, marking a cumulative increase of 65% in the past two years alone. Also noteworthy is that AYR also has been aggressively buying back shares, so it’s committed to returning cash to shareholders on all fronts.
If there is trouble for airlines, naturally Aircastle will suffer. But as long the airline industry sees continued strength, then AYR is a no-brainer to help them keep up with increased demand as the global economy picks up.