Aircastle (NYSE:AYR) acquires and leases jet aircraft to airlines, and invests in debt securities that are backed by commercial jet aircraft (in other words, lending money to airlines to buy their own planes). As of February, 2008, Aircastle owned 130 passenger and cargo aircraft, currently valued at $5.7 billion. ^[1] 90% of Aircastle's aircraft are passenger planes and only 10% ^[2] are freighter planes, as Aircastle mainly leases directly to commercial airlines.

Aircastle leases their aircraft on an operating lease basis, which means Aircastle is responsible for maintaining the planes and must recruit and pay for maintenance staff. Aircastle's clients pay a regular monthly fee as part of a long-term lease that usually lasts from 3-12 years. Operating leases are often used by airlines that need greater flexibility in their fleet (whether in type of planes or number of planes) and have capital constraints (thus making it harder for them to acquire and maintain their own fleet). Aircastle's largest clients include U.S. Airways, Sterling Airways and Swiss International Airlines. Revenues are influenced by the supply and demand of aircraft, which is affected by the overall health of the airline industry. This is in turn affected by factors including the general economic outlook, consumers' demand for travel, and fuel prices. ^[3]

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