The Aviation Leasing Landscape: A Deep Dive into Air Lease and AAR

Let’s talk about aircraft leasing—an industry where metal birds become financial assets, and earnings per share (EPS) growth is the fuel in the engine. If you’re hunting for consistent profits in this space, two names keep popping up: Air Lease Corporation (NYSE:AL) and AAR Corporation (NYSE:AIR). One’s the steady veteran, the other’s the high-growth upstart. But which one’s the better bet for your portfolio? Let’s debug this like a rate-wrecking coder.

The Aviation Leasing Market: A High-Stakes Game

Aviation leasing is a capital-intensive business where timing, asset management, and market positioning matter more than code syntax. The industry thrives on supply-demand imbalances—when airlines need planes but can’t buy them outright, leasing becomes the go-to solution. Right now, constrained aircraft supply and strong demand are pushing lease rates higher, which is great for lessors like Air Lease.

But here’s the catch: aviation is cyclical. Economic downturns, fuel price spikes, and geopolitical instability can ground profits faster than a software bug crashes a system. That’s why EPS growth isn’t just a vanity metric—it’s the lifeblood of long-term shareholder value.

Air Lease: The Steady Performer with Undervalued Potential

Air Lease is the established player in this game, with a portfolio of aircraft that’s growing faster than a tech startup’s user base. Their Q1 2025 results were a clear win: $1.51 EPS vs. estimates of $1.24, a 28% YoY jump in non-GAAP profit, and revenue up 11.3% to $738.3 million. Even Q3 2024 was strong, with EPS hitting $1.25.

But here’s where things get interesting. Despite these solid numbers, Air Lease’s stock trades at a P/E of 10.19x—way below the industry average of 20.34x. That’s like finding a high-performance GPU at a discount. Over the past three years, Air Lease has averaged 11% annual EPS growth, with a net margin of 15.65% and a return on equity of 8.01%.

Now, let’s talk about the elephant in the room: past performance doesn’t guarantee future results. While Air Lease’s share price has climbed over the past five years, EPS has actually declined at an 8.3% annual rate. That’s a red flag. The market might be betting on future growth rather than current earnings, which means the company needs to prove it can sustain its momentum.

AAR Corporation: The High-Risk, High-Reward Play

If Air Lease is the stable veteran, AAR Corporation is the aggressive startup. Recent data shows AAR’s EBIT margins jumping from 3.5% to 7.1%, with revenue growth to boot. But the real headline is the projected growth: earnings and revenue are expected to surge by 75.1% and 4.7% annually, respectively. Even more impressive, EPS is forecast to grow at a staggering 75.8% per year.

That’s the kind of growth that makes investors drool. But here’s the trade-off: AAR is a riskier bet. It’s in the middle of a major transformation, and high-growth projections don’t always materialize. If AAR stumbles, those lofty expectations could turn into a painful correction.

The Bottom Line: Which One’s Right for You?

If you’re a conservative investor who values stability and undervaluation, Air Lease is the safer play. It’s got a strong track record, solid margins, and a discounted valuation. But if you’re willing to take on more risk for the chance at explosive growth, AAR’s projections are hard to ignore.

At the end of the day, aviation leasing is a high-stakes game. The best investors don’t just chase EPS—they analyze financials, assess management, and factor in macroeconomic risks. Whether you go with the steady performer or the high-growth upstart, make sure your investment thesis is as well-constructed as a well-optimized codebase. Because in this market, bugs can be costly.