The world’s largest aircraft lessor, AerCap, expects to deliver full-year profitability at the upper end of its projections as a broader travel rebound and a shortage of new aircraft boost demand for jet leases and sales.

Aengus Kelly, CEO, stated that first-quarter demand, particularly for engine leasing and the acquisition of older aircraft, demonstrated that airlines “simply do not believe” that under pressure manufacturers will be able to deliver new planes on schedule.

The limited supply of aircraft, which Kelly expects to last several years, aided the Dublin-based lessor in increasing first-quarter revenue by 4% to $1.87 billion and forecasting full-year adjusted earnings per share at the upper end of the $7.00 to $7.50 range indicated in March.

At 1355 GMT, its New York-listed shares were up 2%.

“The real interesting trend is the amount of purchases airlines are making,” Kelly said on an investor call, adding that if customers believed there was a rapid answer to delivery delays from Airbus and Boeing, they would extend leases rather than buy planes outright.

“This supports our belief that airlines simply do not believe the OEMs’ (original equipment manufacturers) announced production rates and are planning accordingly.”

AerCap, which has a portfolio of 3,500 airplanes, engines, and helicopters, sold 32 planes between January and March, making it the company’s third most profitable quarter in the last four years.

Kelly stated that leasing rates on some engine types have increased by up to 30% year on year as airlines sought to retain as many planes in the air as possible as global traffic approached pre-pandemic levels in 2019.

“It is clear that the tone of the airline industry continues to be positive, and, unlike in recent years, this is now reflected in all major regions of the world,” he said.

“Demand is strong. According to recent discussions with airlines, their biggest concern is obtaining adequate capacity to meet the increased demand they anticipate over the next several years.”