Air Lease Corp. (ALC) posted second-quarter consolidated net income of $128.3 million, up 11.4% from $115.2 million in the year-ago quarter. Revenue was $464 million, up 18% year-over-year (YOY) from $393.5 million.

ALC has an owned/managed/committed fleet of 704 aircraft, compared to 711 a year ago.

An extended run of delivery delays with the most popular narrowbodies is forcing more than flight cancellations and fleet-strategy changes: Airlines also are paying more for some leased narrowbody lift, ALC executives acknowledge.

“Looking at today’s overall demand picture, the shortage created by the [Boeing] MAX grounding and the Airbus delivery delays have, if anything, strengthened near-term single-aisle demand,” ALC president and CEO John Plueger said on the Aug. 7 second-quarter earnings call. “We have seen an uptick in certain lease rates, particularly on the A321neo. There had already been a strengthening trend in the A320neo prior to the MAX grounding. That trend in that premium continues to look like it’s not only maintaining but, in fact increasing.”

While the mid-March grounding and Boeing’s subsequent delivery halt on the MAX has grabbed the most headlines, Airbus has continued to struggle with A321neo deliveries. Most of the issues are believed to be related to new cabin-configuration options introduced last year that are creating disruptions on the company’s Hamburg, Germany production line.

Air Lease has seen delivery delays on both types. The delays are long enough—particularly on the MAX—to force Air Lease to intervene on customers’ behalf.

“We are working with each airline on a case-by-case basis,” executive board chairman Steven Udvar-Házy said.

“We had lined up interim lift for some of these carriers, both on a dry lease and on short-term wet leases from other airlines,” he added. “We’ve also worked with some of our customers to realign their scheduling and modify their operational parameters to fly more hours with the aircraft that they already have.”

Air Lease has 150 MAX-family aircraft on order. It had about 13 slotted for 2019 deliveries to customers when the MAX was grounded, but now does not expect to place its next one until 2020. Delayed deliveries will be spread out over the next few years.

Udvar-Házy also revealed that one letter of intent for four MAXs with late 2020 deliveries was pending when the fleet was grounded, and the airline “decided to hold off.” They remain unplaced, but are likely to slide into 2021 as Boeing works to catch up on deliveries once the MAX returns to service. Boeing is working on changes and, based on current projections, is confident that the aircraft will be cleared to fly again by 2020.

“People need these aircraft. But at the same time, as you could imagine, as I also have said, our forward placements are a bit muted because, generally speaking, airlines just want to make sure that this airplane is back up and flying safely,” Plueger said. “[MAX lease talks] haven’t stopped. We have a few ongoing dialogues. But certainly they’ve been muted until the sky is clear.”

On the Airbus side, the European manufacturer “has informed us to expect several months of delivery delays relating to certain aircraft scheduled for delivery in 2019 and 2020,” ALC said. The lessor’s revised placement schedule shows 27 A320neo-family aircraft coming in 2020, down from the 40 listed in its first- and second-quarter updates. It also expects to place 16 more A320neo-family aircraft this year. 

Air Lease has 125 A320neo-family aircraft on order, not including 27 A321XLRs and 23 A320neos that are part of announced agreements that have not been firmed up as orders.

Sean Broderick,