Commitments and Contingencies

6 Months Ended

Jun. 30, 2025

Commitments and Contingencies Disclosure [Abstract]

Note 6. Commitments and Contingencies

Aircraft Acquisitions

In April 2025, the Company entered into a supplemental agreement with Boeing to purchase five incremental 737-8 MAX aircraft scheduled to deliver in 2031. In June 2025, the Company entered into an agreement with Airbus to cancel future orders of seven A350F aircraft.

As of June 30, 2025, the Company had contractual commitments to acquire a total of 241 new aircraft from Airbus and Boeing for delivery through 2031, with an estimated aggregate commitment (including adjustments for anticipated inflation) of $14.1 billion. The following table shows the Company’s contractual delivery commitment schedule as of June 30, 2025:


	Estimated Delivery Years
Aircraft Type	Last 6 months of 2025	2026	2027	2028	2029	Thereafter	Total
Airbus A220-100/300	3	3	14	14	2	—	36
Airbus A320/321neo(1)	4	20	38	34	34	—	130
Airbus A330-900neo	—	1	—	—	—	—	1

Boeing 737-8/9 MAX	16	20	21	2	—	5	64
Boeing 787-9/10	4	5	1	—	—	—	10
Total(2)	27	49	74	50	36	5	241


(1) The Company’s Airbus A320/321neo aircraft orders include 13 long-range variants and 49 extra long-range variants.
(2) The table above reflects aircraft deliveries based on contractual documentation and production adjustments as communicated by Airbus and Boeing through August 4, 2025. The Company’s contractual delivery commitment schedule is subject to a number of factors outside its control, including ongoing delays by Airbus and Boeing for some aircraft, and the Company cannot guarantee delivery of any particular aircraft at any specific time notwithstanding its contractual delivery commitment schedule.

The table above is subject to change based on Airbus and Boeing delivery delays. As noted below, the Company expects delivery delays for most of the aircraft in its orderbook. The Company remains in discussions with Airbus and Boeing to determine the extent and duration of delivery delays; however, the Company is not yet able to determine the full impact of these delays.

Pursuant to its purchase agreements with Airbus and Boeing, the Company agrees to contractual delivery dates for each aircraft ordered.These dates can change for a variety of reasons, however for the last several years, manufacturing delays have significantly impacted the planned purchases of the Company’s aircraft on order with both Airbus and Boeing.

The FAA continues to enforce a cap on Boeing’s 737 MAX production until quality control issues are resolved. The Company expects its Boeing deliveries will continue to be delayed. In addition, in the first quarter of 2025, Airbus informed the Company that there would be meaningful additional production delays of approximately one year, affecting primarily A320/321neo aircraft deliveries. The broader aviation supply chain remains highly constrained, impacting production capacity for both Airbus and Boeing.

The aircraft purchase commitments discussed above could also be impacted by cancellations. The Company’s purchase agreements with Airbus and Boeing generally provide each of the Company and the manufacturers with cancellation rights for delivery delays starting at one year after the original contractual delivery date, regardless of cause. In addition, the Company’s lease agreements generally provide each of the Company and the lessee with cancellation rights related to certain aircraft delivery delays that typically parallel the cancellation rights in the Company’s purchase agreements.

As a result of continued manufacturing delays and supply chain constraints described herein, the Company’s aircraft delivery schedule could continue to be subject to material changes and delivery delays are expected to extend for at least the next three to four years.

In April 2025, the U.S. imposed a 10% baseline tariff on all countries and individualized higher tariffs on nations with which the U.S. assesses that it has the largest trade deficits, while retaliatory tariffs by other countries, such as China and Canada, have been imposed on U.S. products and goods. This has resulted in trade policy uncertainty and an escalation in trade tensions, resulting in significant market volatility. On May 1, 2025, the U.S. Department of Commerce initiated an investigation into the effects on national security of imports of commercial aircraft and jet engines. It is unclear what the outcome of this investigation will be and what impact, if any, it will have on the aviation industry. As of the date of this filing, tariff modifications imposed by the U.S. are paused until August 2025, with the exception of higher tariffs on China. As of the date of this filing, the U.S. government announced it has entered into preliminary trade frameworks with the European Union (“E.U.”) and a number of countries, including Japan, Vietnam and South Korea, that imposes at least a 15% tariff on goods entering the U.S. and no announced retaliatory tariffs on U.S. goods. On July 31, 2025, the U.S. government announced plans to implement higher tariffs on imports from nearly 70 other countries, including Canada and Brazil, which would go into effect on August 7, 2025, though aircraft are currently exempt from Brazil’s tariff scheme. Generally, Boeing aircraft manufactured in the U.S. and delivered to customers in other countries may be subject to tariffs; however, the preliminary trade framework announced with the E.U. preserves the zero tariff regime on Boeing and Airbus aircraft and parts imported into the U.S. and the E.U. As of the date of this filing, the Company has no aircraft placed for delivery from its orderbook that are expected to be subject to currently announced tariffs. As of June 30, 2025, approximately 1.7% of the Company’s aircraft by net book value are on lease to lessees located in China, and the Company does not have any scheduled future aircraft deliveries to Chinese airline customers.

The Company’s leases are primarily structured as triple net leases, whereby the lessee is responsible for all operating costs including the costs associated with the importation of aircraft. The Company’s lessees are generally obligated to pay such tariffs to customs authorities. If lessees are unwilling or unable to assume such costs, it could have an adverse impact on demand for commercial aircraft or result in lease cancellations for those customers whose aircraft delivery has been delayed by over one year and who hold lease cancellation rights.

Commitments for the acquisition of these aircraft, calculated at an estimated aggregate commitment (including adjustments for anticipated inflation) of approximately $14.1 billion as of June 30, 2025, are as follows:


Years ending December 31,	(in thousands)
2025 (excluding the six months ended June 30, 2025)	$	1,726,416
2026	3,337,861
2027	4,111,983
2028	2,631,627
2029	1,950,361
Thereafter	347,307
Total	$	14,105,555

The Company has made non-refundable deposits on flight equipment purchases of $1.1 billion and $0.8 billion as of June 30, 2025 and December 31, 2024, respectively, which are subject to manufacturer performance commitments. If the Company is unable to satisfy its purchase commitments, the Company may be forced to forfeit its deposits and may also be exposed to breach of contract claims by its lessees as well as the manufacturers.