Willis Lease Finance Corporation

What they do

WLFC acquires commercial aircraft and aircraft engines and leases them primarily under operating leases to airlines and maintenance, repair and overhaul organizations worldwide, supplemented by third-party asset management fees. Its wholly-owned subsidiary Willis Aero is vertically integrated into engine disassembly and spare parts sales. As of December 31, 2025, the operating lease portfolio held $2,801.7 million of equipment, comprising 363 engines, 20 aircraft, one marine vessel and other leased parts and equipment, leased to 69 lessees in 37 countries, with an additional 116 engines managed for third parties. The company reports two segments: Leasing and Related Operations, which was 94.9% of 2025 consolidated revenue, and Spare Parts Sales.

Revenue drivers

• Leasing and Related Operations — Lease rent and maintenance reserve revenue from operating leases of engines and aircraft; this segment was 94.9% of 2025 consolidated revenue and 95.4% of 2024 revenue. Lease rent revenue was $77.1 million in Q2 2026, up 6.7% year over year, while maintenance reserve revenue was $46.5 million, down 8.4%.
• Gains on sale of leased equipment — Disposition of engines and other equipment from the lease portfolio; Q2 2026 produced a $32.0 million gain from the sale of 21 engines and other parts and equipment, up 16.2% from $27.6 million in Q2 2025.
• Spare Parts Sales (Willis Aero) — Sale of aircraft engine parts and materials sourced from acquired or consigned engines; spare parts and equipment sales were $21.2 million in Q2 2026, down 30.2% from $30.4 million in Q2 2025.
• Managed assets and funds — Fee income from managing engines owned by third parties and from investment fund partnerships; the company managed 145 engines, one airframe and related equipment as of June 30, 2026, and launched fund partnerships with Liberty Mutual Investments in March 2026 and Blackstone Credit Insurance in April 2026.

Recent performance

Second quarter 2026 income from operations was $34.0 million, up 20.2% from the prior-year quarter, on lease rent revenue of $77.1 million and net income attributable to common shareholders of $28.7 million. Quarterly core lease rent and maintenance reserve revenues totaled $123.6 million, up 0.5%, while the $32.0 million gain on sale of leased equipment rose 16.2%. Spare parts and equipment sales fell 30.2% to $21.2 million, and interest revenue dropped 67.6% to $1.2 million. Adjusted EBITDA was $120.7 million, up 4.0%, and assets under management reached $4.4 billion. Full-year 2025 revenue was $730.2 million with net income of $114.0 million and diluted EPS of $15.39.

Strategy

Management's stated focus in the first half of 2026 was establishing and building Willis Aviation Capital, with total assets under management growing 21% year over year to $4.4 billion. The company launched fund partnerships with Liberty Mutual Investments in March 2026 and Blackstone Credit Insurance in April 2026 to expand third-party managed capital alongside its owned portfolio. On July 10, 2026, a subsidiary agreed to acquire WNG II Aircraft Leasing (Cayman) Ltd. and WNG Aircraft Management 3, LLC from WNG Capital affiliates for a base purchase price of approximately $379.3 million, adding a portfolio of commercial aircraft and spare aircraft engines, subject to customary closing conditions. The company effected a three-for-one forward stock split on July 17, 2026, with split-adjusted trading beginning July 21, 2026.

Risks

• Lessee credit and airline cycle — WLFC's lease and parts revenue depends on the financial condition of commercial aircraft operators and MROs, which can be hurt by air travel demand, interest rates, geopolitics and government support changes outside the company's control.
• Interest rate and funding costs — The company carries $2.32 billion of long-term debt against $708.6 million of equity as of June 30, 2026, and its filings cite changes in interest rates and credit availability as risks to both lessees and its own financing.
• Spare parts and residual value exposure — Spare parts and equipment sales fell 30.2% year over year in Q2 2026, and the company relies on selling engines and equipment from its lease portfolio at gains, which depends on residual values holding up.
• Tariffs and macro conditions — The 10-Q cites uncertainty around potential new or increased tariffs, inflation and broader macroeconomic and geopolitical conditions; management currently does not believe tariffs have a material impact but says the ultimate extent is not reasonably estimable.

Outlook

Management highlighted 21% year-over-year growth in assets under management to $4.4 billion and the launch of the Liberty Mutual and Blackstone fund partnerships as evidence it delivered on its Willis Aviation Capital build-out in the first half of 2026. The pending WNG acquisition, at a base price of approximately $379.3 million, would add commercial aircraft and spare engines, though it remains subject to closing conditions. The company notes uncertainty around interest rates, inflation, tariffs and macroeconomic conditions and does not currently expect tariffs to have a material impact, while cautioning that the ultimate effects are not reasonably estimable.