FTAI Aviation Ltd.

    FTAI ·NASDAQ ·Services-Miscellaneous Equipment Rental & Leasing
    Other securities: FTAIM FTAIN
    Loading chart...
    Track markets on TradingView

    Loading financial statements...

    Financial statements

    data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

    showing loading…

    From 10-Q filed 2026-05-01 (period ending 2026-03-31).


    Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
    The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand FTAI Aviation Ltd. (the “Company,” “we,” “our” or “us”). Our MD&A should be read in conjunction with our unaudited consolidated financial statements and the accompanying notes, and with Part II, Item 1A, “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q.
    Overview
    We are a leading independent engine maintenance platform focused on the CFM56-5B, CFM56-7B and V2500 aircraft engines which power the 737NG and A320ceo aircraft. We repair and rebuild engines in our maintenance facilities and with our joint venture partners, and sell or lease the engines to airlines and asset owners around the world. Our primary business model is to sell engines via exchange through our proprietary Maintenance, Repair and Exchange (“MRE”) model which is reported under our Aerospace Products segment.
    We also own and manage a portfolio of on- and off-lease aircraft and engines through our Aviation Leasing segment. While historically these investment activities have been primarily held on balance sheet, at the end of 2024, we launched our Strategic Capital Initiative, which consists of an asset management business that manages third-party capital to invest in on-lease aircraft. We expect our primary investment activities to be through our Strategic Capital Initiative going forward.
    As of March 31, 2026, we had total consolidated assets of $4.5 billion and total equity of $431.7 million.
    Internalization of Management
    On May 28, 2024, the Company entered into definitive agreements with the Former Manager and Master GP to internalize the Company’s management function. As part of the termination of the Management Agreement, the Company (i) paid the Former Manager (for itself and on behalf of the Master GP, as applicable) the Cash Consideration, the compensation accrued and payable, but not yet paid, under the Management Agreement and the expenses that were reimbursable, but not yet reimbursed, under the Management Agreement; (ii) issued to the Former Manager (for itself and on behalf of the Master GP, as applicable) the Share Consideration; (iii) purchased from Master GP all of its partnership interests in FTAI Aviation Holdco Ltd., a subsidiary of the Company, in exchange for $30 thousand. Following the Internalization, the Company no longer pays management fees or incentive distributions to the Former Manager and Master GP.
    In connection with the termination of the Management Agreement, the Company also entered into a Transition Services Agreement with the Former Manager. Under the Transition Services Agreement, the Former Manager was required to continue to provide the Company and its affiliates with all of the Services for a transition period until October 31, 2024, during which the Company procured replacements for the Services. In addition, the Former Manager was required to continue to provide the services that were reasonably required by the Company to prepare its quarterly and annual financial statements until May 31, 2025. The Services were provided to the Company for a fee equal to the Former Manager’s cost of providing the Services, including the allocated cost of, among other things, overhead, employee wages and compensation, rent and related real estate expenses and actually incurred out-of-pocket expenses, plus a mark-up of ten percent (10%).
    Strategic Capital Initiative
    On December 30, 2024, we announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors. The Strategic Capital Initiative, and its related partnerships, allows us to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale. The first partnership under the initiative (the “2025 Partnership”) focuses on acquiring 737NG and A320ceo aircraft. The 2025 Partnership completed its fundraise in October 2025 with $2.0 billion of equity commitments.
    The 2025 Partnership, and follow-on partnerships, is the primary buyer of all future on-lease 737NG and A320ceo aircraft. The Company, as the Servicer, provides aircraft management services to the 2025 Partnership, and the Company receives customary, market-based compensation for providing such services. The Company also made a minority capital commitment and will make additional commitments to the 2025 Partnership in the same proportion relative to additional third-party institutional investors.
    Operating Segments
    The key factors used to identify the reportable segments are the organization and alignment of our internal operations and the nature of our products and services. Our two reportable segments are (i) Aerospace Products and (ii) Aviation Leasing. The Aerospace Products segment, through our maintenance facilities and joint ventures, among other investments, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines. The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to lessees, directly and also through its equity method investment.

    Corporate and Other primarily consists of debt, unallocated corporate general and administrative expenses, internalization fee and management fees and incentive compensation pursuant to the Management Agreement prior to the Internalization effective May 28, 2024. Additionally, Corporate and Other also includes offshore energy related assets, which consist of equipment that support offshore oil and gas activities and production, and expenses relating to FTAI Power.
    28


    Adjusted EBITDA (Non-GAAP)
    Besides net income (loss), the chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer, utilizes Adjusted EBITDA as a key performance measure. Adjusted EBITDA is not a financial measure in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). This performance measure provides the CODM with the information necessary to assess operational performance and make resource and allocation decisions. We believe Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing our operational performance.
    Adjusted EBITDA is defined as net income (loss) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and preferred shares and capital lease obligations, asset impairment charges, incentive allocations, depreciation and amortization expense, interest expense and dividends on preferred shares, internalization fee to affiliate, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities, if any.

    29


    Results of Operations
    Comparison of the three months ended months ended March 31, 2026 and 2025
    The following table presents our consolidated results of operations:
    Three Months Ended March 31,Change
    (in thousands)20262025
    Revenues
    Aerospace products revenue$522,585 $264,425 $258,160 
    MRE Contract revenue221,230 100,638 120,592 
    Lease income39,892 68,440 (28,548)
    Maintenance revenue30,599 49,607 (19,008)
    Asset sales revenue10,184 18,939 (8,755)
    Other revenue (1)
    		6,207 31 6,176 
    Total revenues830,697 502,080 328,617 
    Expenses
    Cost of sales524,268 248,714 275,554 
    Operating expenses64,987 32,438 32,549 
    General and administrative2,413 3,116 (703)
    Acquisition and transaction expenses16,361 7,292 9,069 
    Depreciation and amortization52,289 59,562 (7,273)
    Total expenses660,318 351,122 309,196 
    Other (expense) income
    Interest expense(61,407)(62,040)633 
    Equity in losses of unconsolidated entities (2)
    		(2,363)(7,614)5,251 
    Gain on sale to the 2025 Partnership15,168 10,870 4,298 
    Other income47,582 33,071 14,511 
    Total other expense(1,020)(25,713)24,693 
    Income before income taxes
    		169,359 125,245 44,114 
    Provision for income taxes
    		31,460 22,859 8,601 
    Net income
    		137,899 102,386 35,513 
    Less: Dividends on preferred shares3,709 6,115 (2,406)
    Less: Loss on redemption of preferred shares— 6,327 (6,327)
    Net income attributable to shareholders
    		$134,190 $89,944 $44,246 
    (1)Includes servicing fees of $5,861 and $0 for the three months ended March 31, 2026 and 2025, respectively, from the 2025 Partnership.
    (2)Includes the profit elimination of $(10,000) and $(6,950) for the three months ended March 31, 2026 and 2025, respectively, for sales to the 2025 Partnership.



    30


    The following table sets forth a reconciliation of net income (loss) attributable to shareholders to Adjusted EBITDA:
    Three Months Ended March 31,Change
    (in thousands)20262025
    Net income attributable to shareholders
    		$134,190 $89,944 $44,246 
    Add: Provision for income taxes
    		31,460 22,859 8,601 
    Add: Equity-based compensation expense6,347 4,889 1,458 
    Add: Acquisition and transaction expenses16,361 7,292 9,069 
    Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations— 6,327 (6,327)
    Add: Asset impairment charges— — — 
    Add: Incentive allocations— — — 
    Add: Depreciation and amortization expense (1)
    		59,513 68,387 (8,874)
    Add: Interest expense and dividends on preferred shares65,116 68,155 (3,039)
    Add: Internalization fee to affiliate— — — 
    Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)
    		20,227 41 20,186 
    Less: Equity in (earnings) losses of unconsolidated entities (3)
    		(7,637)664 (8,301)
    Adjusted EBITDA (non-GAAP)$325,577 $268,558 $57,019 
    (1)Includes the following items for the three months ended March 31, 2026 and 2025: (i) depreciation and amortization expense of $52,289 and $59,562, (ii) lease intangible amortization of $337 and $3,206 and (iii) amortization for lease incentives of $6,887 and $5,619, respectively.
    (2)Includes the following items for the three months ended March 31, 2026 and 2025: (i) net income of $7,637 and net loss of $664, (ii) interest expense of $3,496 and $0, (iii) depreciation and amortization expense of $9,067 and $158, (iv) acquisition and transaction expenses of $0 and $547, and (v) tax expense of $27 and $0, respectively.
    (3)Excludes the profit elimination of $10,000 and $6,950 for the three months ended March 31, 2026 and 2025, respectively, for sales to the 2025 Partnership.
    Revenues
    Comparison of the three months ended March 31, 2026 and 2025
    Total revenues increased by $328.6 million, driven by the following:
    •Aerospace products revenue increased by $258.2 million, primarily due to a $246.8 million increase in CFM56-5B, CFM56-7B and V2500 engine and module sales.
    •MRE Contract revenue increased by $120.6 million, primarily due to an increase in engine and module sales made to the 2025 Partnership.
    •Lease income decreased by $28.5 million, primarily due to decreases in aircraft lease revenue of $24.9 million, driven by the sale of Seed Assets to the 2025 Partnership.
    •Maintenance revenue decreased by $19.0 million, due to decreases in aircraft maintenance revenue of $8.1 million and engine maintenance revenue of $10.9 million, both driven by a decrease in revenue generating assets on lease.
    Expenses
    Comparison of the three months ended March 31, 2026 and 2025
    Total expenses increased by $309.2 million, driven by the following:
    •Cost of sales increased by $275.6 million, primarily due to increases in CFM56-5B, CFM56-7B and V2500 engine and module sales, and parts inventory sales, which directly corresponds to components of increases in Aerospace products revenue over the same period.
    •Operating expenses increased by $32.5 million, primarily due to increases in compensation and benefits expense and shipping and logistics expense across our operating segments, as well as increased technology development costs and general operating expense resulting from acquisitions in the second half of 2025.
    Other (expense) income
    Comparison of the three months ended March 31, 2026 and 2025
    Total other expense decreased by $24.7 million driven by the following:
    •Other income increased $14.5 million, driven by an increase in insurance proceeds in the current period.
    31


    •Equity in losses of unconsolidated entities increased by $5.3 million, driven by net income realized by the 2025 Partnership.
    •Gain on sale to the 2025 Partnership increased by $4.3 million, resulting from the sale of 9 aircraft to the 2025 Partnership within the Aviation Leasing Segment.
    Provision for income taxes
    The provision for income taxes increased $8.6 million for the three months ended March 31, 2026, as compared to the prior period, primarily driven by higher income generated in the Aerospace Products segment within taxable jurisdictions.
    Net income
    Net income increased by $35.5 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the changes noted above.
    Adjusted EBITDA (Non-GAAP)
    Adjusted EBITDA increased by $57.0 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the changes noted above.
    32


    Aerospace Products Segment
    The Aerospace Products segment, through our maintenance facilities and joint ventures, among other investments, develops and manufactures, repairs/refurbishes, and sells aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B, and V2500 commercial aircraft engines. Our engine, module, and parts sales are facilitated through a dedicated commercial maintenance program designed to focus on modular and parts repair and refurbishment of CFM56-7B and CFM56-5B engines. In addition, other serviceable used modules and parts are sold through our exclusive partnership, which is responsible for the teardown, repair, marketing, and sales of parts from our CFM56 engine pool.
    In 2023, we acquired the remaining interest in Quick Turn Engine Center LLC (“QuickTurn”), a dedicated hospital maintenance and testing facility specializing in the CFM56-7B and CFM56-5B engines.
    In 2024, we acquired Lockheed Martin Commercial Engine Solutions (“LMCES”) to establish permanent engine and module manufacturing capabilities.
    In 2025, we entered into an agreement within our MRE business to supply replacement aircraft engines and modules for the life of the 2025 Partnership. We also acquired Pacific Aerodynamic Inc. (“Pac Aero”), a specialist in CFM56 compressor blade and vane repairs, expanding our repair capabilities, and the MRE business of AerotechOPS (“ATOPS”), expanding our MRE business in Miami.
    Additionally, we maintain a (i) 25% equity interest in the Advanced Engine Repair joint venture, which focuses on developing innovative cost-saving programs for engine repairs, (ii) 50% equity interest in QuickTurn Europe, which operates as a dedicated maintenance, repair, and overhaul facility for CFM56 engines, and (iii) 50% equity interest in Prime Engine Accessories LLC, which focuses on developing in-house CFM56 accessory maintenance repairs.
    The following table presents our results of operations:
    Three Months Ended March 31,Change
    (in thousands)20262025
    Revenues
    Aerospace products revenue $522,585 $264,425 $258,160 
    MRE Contract revenue221,230 100,638 120,592 
    Total revenues743,815 365,063 378,752 
    Expenses
    Cost of sales511,012 228,755 282,257 
    Operating expenses10,839 5,687 5,152 
    Acquisition and transaction expenses(15)1,132 (1,147)
    Depreciation and amortization4,678 3,584 1,094 
    Total expenses526,514 239,158 287,356 
    Other income (expense)
    Equity in (losses) earnings of unconsolidated entities
    		(40)113 (153)
    Other income
    		171 — 171 
    Total other income
    		131 113 18 
    Income before income taxes217,432 126,018 91,414 
    Provision for income taxes33,697 19,375 14,322 
    Net income attributable to shareholders$183,735 $106,643 $77,092 







    33


    The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA:
    Three Months Ended March 31,Change
    (in thousands)20262025
    Net income attributable to shareholders$183,735 $106,643 $77,092 
    Add: Provision for income taxes
    		33,697 19,375 14,322 
    Add: Equity-based compensation expense27 155 (128)
    Add: Acquisition and transaction expenses(15)1,132 (1,147)
    Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations— — — 
    Add: Asset impairment charges— — — 
    Add: Incentive allocations— — — 
    Add: Depreciation and amortization expense
    		4,678 3,584 1,094 
    Add: Interest expense and dividends on preferred shares— — — 
    Add: Internalization fee to affiliate— — — 
    Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1)
    		414 169 245 
    Less: Equity in losses (earnings) of unconsolidated entities
    		40 (113)153 
    Adjusted EBITDA (non-GAAP)$222,576 $130,945 $91,631 
    (1)Includes the following items for the three months ended March 31, 2026 and 2025: (i) net loss of $40 and net income of $113, (ii) depreciation and amortization expense of $427 and $56, and (iii) tax expense of $27 and $0, respectively.
    Revenues
    Comparison of the three months ended March 31, 2026 and 2025
    Total revenues increased by $378.8 million, due to the following:
    •Aerospace Products revenue increased by $258.2 million, primarily due to a $246.8 million increase in CFM56-5B, CFM56-7B and V2500 engine and module sales.
    •MRE Contract revenue increased by $120.6 million, primarily due to an increase in engine and module sales made to the 2025 Partnership.
    Expenses
    Comparison of the three months ended March 31, 2026 and 2025
    Total expenses increased by $287.4 million, due to the following:
    •Cost of sales increased by $282.3 million, primarily due to increases in CFM56-5B, CFM56-7B and V2500 engine and module sales and parts inventory sales, which directly corresponds to components of increases in Aerospace products revenue over the same period.
    •Operating expenses increased by $5.2 million, primarily due to higher operating expenses due to the acquisition of ATOPS, compensation and benefits expense due to increased headcount at the Company’s maintenance facilities, as well as an increase in shipping and logistics expense.
    Provision for income taxes
    The provision for income taxes increased by $14.3 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the increase in income discussed above from Aerospace Products activities in jurisdictions subject to taxes.
    Net income
    Net income increased $77.1 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the changes noted above.
    Adjusted EBITDA (Non-GAAP)
    Adjusted EBITDA increased $91.6 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the changes noted above.
    34


    Aviation Leasing Segment
    As of March 31, 2026, in our Aviation Leasing segment, we own and manage 230 aviation assets, consisting of 29 commercial aircraft and 201 engines.
    As of March 31, 2026, 26 of our commercial aircraft and 114 of our engines were leased to operators or other third parties. Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease. Our aviation equipment was approximately 73% utilized during the three months ended March 31, 2026, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes. Our aircraft currently have a weighted average remaining lease term of 37 months, and our engines currently on-lease have an average remaining lease term of 38 months. The table below provides additional information on the assets in our Aviation Leasing segment, including transfers which involve aircraft breakdowns, engine transfers from leasing equipment to inventory for manufacturing and sales, and engine transfers from inventory to leasing equipment for rebuilding and sales:
    Aviation AssetsWidebodyNarrowbodyTotal
    Aircraft
    Assets at January 1, 2026
    		5 42 47 
    Purchases— — — 
    Sales— (9)(9)
    Transfers— (1)(1)
    Insurance settlement - Russia assets
    		(3)(5)(8)
    Assets at March 31, 2026
    		2 27 29 
    Engines
    Assets at January 1, 202618 225 243

    Loading holders...

    Held by

    holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

    Holder Type ETF MF Position ($) % of holder Δ % of holder Holder AUM

    Recent insider activity

    Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 4 transactions across 2 insiders. Net: -254,515 shares, -$61,599,235.

    Date Insider Role Action Shares Price Value
    2026-05-27 HANNAWAY JUDITH A Director Sell -255 $253.89 -$64,742
    2026-05-04 TUCHMAN MARTIN indirect Director Sell -67,500 $241.99 -$16,334,460
    2026-05-04 TUCHMAN MARTIN Director Sell -43,176 $240.64 -$10,389,959
    2026-05-01 TUCHMAN MARTIN Director Sell -143,584 $242.44 -$34,810,074

    Source: SEC Form 4 filings.

    Next expected filings

    • ~2026-07-27 10-Q expected by 2026-08-05 (in 42 days)
    • ~2026-10-25 10-Q expected by 2026-11-03 (in 132 days)
    • ~2027-02-26 10-K expected by 2027-02-27 (in 256 days)
    • ~2027-04-27 10-Q expected by 2027-05-06 (in 316 days)

    Predicted from historical filing cadence; not an SEC commitment.

    Recent SEC filings

    • 2026-05-01 10-Q Quarterly Report
    • 2026-05-01 S-3ASR S-3ASR
    • 2026-04-30 8-K Material Agreement Entered; Material Financial Obligation; Other Events; Financial Statements and Exhibits
    • 2026-04-29 8-K Earnings Release; Financial Statements and Exhibits
    • 2026-04-15 DEF 14A Proxy Statement
    • 2026-03-06 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
    • 2026-02-27 10-K Annual Report
    • 2026-02-25 8-K Earnings Release; Financial Statements and Exhibits
    • 2026-02-12 8-K Officer/Director Change
    • 2026-01-28 8-K Officer/Director Change
    • 2025-10-29 10-Q Quarterly Report
    • 2025-09-05 8-K Completion of Acquisition/Disposition; Financial Statements and Exhibits
    • 2025-07-31 10-Q Quarterly Report
    • 2025-07-30 8-K Earnings Release; Financial Statements and Exhibits
    • 2025-06-24 8-K Changes in Auditor; Financial Statements and Exhibits