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AerCap credits European recovery for improved global aircraft leasing market

The global market for commercial aircraft leasing has generally improved in recent months, driven by signs of recovery in Europe, AerCap Holdings NV CEO Aengus Kelly said.

Addressing analysts on the company's second-quarter earnings conference call, Kelly said conditions have rebounded in both Eastern and Western Europe, a region he described as the top market in the world in terms of available-seat miles. While available-seat mile growth, a key industry metric, has decelerated in North America, Kelly said the developments are understandable as the market continues to mature.

Kelly has also seen recovery in Russia, Turkey and Brazil, three markets that he said have come under pressure this year.

"We see Brazil getting better and that will bring the rest of South America with it," Kelly said.

When asked about reports of an uptick in deferrals or cancellation of plane orders in the Middle East, Kelly indicated that the problem stemmed from a surge in aircraft orders throughout the region over a short period of time. AerCap Holdings does not have any airplanes scheduled for delivery in the Middle East through prominent international carriers, Kelly added.

AerCap Holdings also reauthorized a new $250 million share repurchase program, which will run through Dec. 31. The company previously estimated $900 million in excess capital for 2017 amid expectations of approximately $1 billion in annual aircraft sales, CFO Peter Juhas said. The company's full-year projections for aircraft sales are expected to be well above the prior estimates, Juhas added.