NEW YORK (TheStreet) -- Shares of Aircastle (AYR) are up a healthy 9% on the year. Yet investors may wonder why the stock is so drastically underperforming the airline index, which is up a whopping 40% on the year.
Aircastle CEO Ron Wainshal explained to TheStreet TV's Gregg Greenberg that his company's shares are up less than other more volatile airline-industry stocks because of Aircastle's more stable business model.
Aircastle acquires, leases and sells commercials jets. It's not extremely susceptible to the gyrations of the global economy, Wainshal said. Airlines, on the other hand, have a less stable business, and thrive during certain economic conditions and struggle in others, he said.
The airline business also has low margins, Wainshal noted. And while the airlines benefit greatly from falling fuel prices -- which is the largest input costs for these companies -- so does Aircastle, since demand for its aircraft increases.
Aircastle, with a market cap of $1.7 billion, has sold 37 aircrafts in the past nine months, bringing its fleet to 140 planes. The company continues to grow its portfolio, Wainshal added, and he expects to see further growth in the future.
The company's sales and leases aren't the only things growing either. In the third quarter, Aircastle announced a $100 million share buyback program, as well as a 10% boost to its dividend.