Feb 13 (Reuters) - Air Lease Corp's ( AL ) CEO said on

Thursday he expected lease rates and aircraft valuations to rise

on a shortfall of commercial planes, after the company reported

lower quarterly revenue primarily due to a decline in

end-of-lease revenue.

Aircraft lessors are benefiting from high rental revenue as

airlines look for aircraft that are in short supply due to

supply chain problems, along with lower production levels of

Boeing's ( BA ) 737 MAX and engine snags.

But lessors and airlines are still wrestling with delivery

delays from planemakers Boeing ( BA ) and Airbus. Air Lease ( AL )

expects to receive airplanes worth $3 billion to $3.5 billion in

2025, with 80% coming from Boeing ( BA ).

Air Lease ( AL ) also expects to sign new leases at higher rates as

lower-yielding leases agreed when the market was weak during the

COVID-19 pandemic expire.

Air Lease ( AL ) CEO John Plueger said he expected $5 billion of

leases from that period to roll off over the next two years.

Plueger also told analysts that demand for twin-aisle

wide-body jets has surged faster than demand for single-aisle

planes over the past six months, reversing a post-pandemic

trend.

Air Lease ( AL ) Executive Chairman Steven Udvar-Hazy said demand

for larger planes was underpinned by passenger demand for

international travel, an aging fleet and shortfall in supply as

Boeing ( BA ) and Airbus wrestle with production challenges on their

787 and A350 models.

It's "developing into what we expect to be a protracted

shortfall of good, widebody aircraft over multiple years to

come," Udvar-Hazy said.

Given sustained demand for large commercial jets, Udvar-Hazy

said he saw room for a third player in the market now dominated

by Boeing ( BA ) and Airbus, although any new aircraft would need

engines that had significantly improved reliability.

"But I think that third party - and the one that's talked

about most is (Brazil's) Embraer ( ERJ ) - would need a partner in that

program that has financial deep pockets," he said.

In its financial report, Air Lease ( AL ) said its revenue in the

fourth quarter fell 3.7% to $712.9 million and net income

declined to $93 million from $211 million in the same period of

2023, as it also made higher interest payments on funds borrowed

to finance aircraft purchases.

But for the full year, the California-based lessor generated

record annual revenues, helped by the company's $5 billion in

aircraft purchases from its orderbook, and $1.7 billion in

aircraft sales, it said.

(Reporting By Allison Lampert in Montreal and Nathan Gomes in

Bengaluru; Editing by Anil D'Silva and Jamie Freed)