Report Overview

Global Aircraft Leasing Market Forecast and Trends

The Global Aircraft Leasing market is projected to reach the valuation of USD 473.6 million by the year 2026 by growing at a CAGR of 7.5% during the forecast period 2020-2026. The aircraft leasing market is expanding its foothold with the rise in aircraft operators and the companies that, in recent years, are allowing aircraft lease services.

In the past few years, numerous airline companies have substituted aircraft leasing for their operations to reduce the financial burden and to surge the number of aircraft. Due to these reasons, the aircraft leasing market has grown extensively.

Additionally, another prime reason for the market's growth is the commercial banks that are the prime source of aircraft financing that are helping the leasing companies to gain considerable momentum to organize themselves into the aircraft leasing market. These are the prime factors that are positively influencing the market for aircraft leasing at the global level and are expected to increase at a rapid pace to gain more valuation during its projected period.

At the same time, wet-leasing aircraft are favored more to be acquired for a short period of time, and for this, the market is gaining substantial demand.

Global Aircraft Leasing Market: Overview

Aircraft lease is a contractual arrangement availed to airlines and other aircraft operators (lessees) by leasing companies (lessors). Its main advantage is to lessen the financial burden on the airlines' balance sheet while procuring new aircraft or adjust capacity over shorter terms.

The structure of a lease agreement gives specific obligations, some of which are a combination of a security deposit and a monthly lease rate based on the aircraft value and its depreciation schedule. To compensate the risk involved, the lease rate should reflect the sum of all risks associated with the multiple business layers, along with the macroeconomic aspect. There is a practice of increasing the security deposit depending on the legal and operational considerations of the specific country and lessee.

Some problems faced by lessees in developing countries will include the poor historical past performance of local airlines, inexistent credit rating, difficulties in exporting hard currencies back to lessors or high-interest rates, and currency mismatch between the income and its liabilities (airfare sales and lease payment). Legal aspects and cost of recovering and remarketing the asset should the lessee default will also impact the deposit amount and rent required by lessors to compensate for those factors.

Growth drivers

Provides flexibility for aircraft operations

Aviation works in a highly regulated business environment of which compliance with its regulations is of paramount importance. Maintenance is vital to safety, and all other activities from financing to catering are essential to the final consumer product, a contract of carriage sold as a flight ticket. While numerous older airlines were government-owned at some point, this has shifted through liberalization dramatically, especially in the mature markets (North America and Europe). In emerging economies, the role of government-controlled airlines is still significant and even dominant in the fast-growing Middle East regions.

Increasing Commercial Aircraft Leasing

Aircraft leasing for commercial purposes is increasing day by day as more people prefer to travel by airplane than any other mode of transportation. With the value of the commercial leased aircraft asset portfolio projected to hit USD 502 billion by 2024, commercial aircraft leasing is undoubtedly a standard option for operators seeming to expand their fleets to meet growing traffic demands. These operators traditionally purchased their planes, but now are increasingly turning to operate leases instead. It's a gentle balance of determining which aircraft will maintain their value and maintaining the risks of ownership.

Restraint

High Cost

Aircraft leasing cost is very high, and thus for small airlines, it is not feasible to afford high costs due to economic issues. The total leasing cost includes not only financing rates but also the insurance costs are also included; these costs can be higher than for buying.

Global Aircraft Leasing Market: Leasing Type

Based on leasing type, the global aircraft leasing market segmented into Wet leasing and Dry leasing. Wet leasing is expected to grow at a significant rate during the forecast period. As in Wet Lease, ACMI (Aircraft, Crew, Maintenance, and Insurance) is issued by the lessor. Usually, the leasing term ranges from one month to two years, and the lessor controls the aircraft's operating authority.

Whereas in Dry leasing, the aircraft is provided by the aircraft owner/lessor (the aircraft operator or the airline). The Lease does not provide crew, insurance, fuel, maintenance, or support equipment. Dry leasing is used for a longer period of time.

Global Aircraft Leasing Market: Aircraft Type

Based on aircraft type, the global aircraft leasing market segmented into narrow-body, wide-body, and others. The narrow-body segment is expected to have the largest market share during the projected period. The wide-body segment includes the aircraft leasing market procured by the aircraft manufacturers. These aircraft OEMs are mostly present in North America and Europe, thereby resulting in higher market size in these regions.

Global Aircraft Leasing Market: Regional Insights

Based on region, the global aircraft leasing market segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. Asia-Pacific region is expected to be the fastest-growing market for the aircraft leasing market during the projected period. Over the years, with growing incomes across the region, there has been an increasing demand for airplane travel in the area, which propels further developments in aircraft leasing. It is anticipated that by 2035, more than 16,000 airplanes would be delivered in the region. Moreover, due to the cheap labor rates, North American airline companies will outsource 60% of their retrofitting activities to Asia, where it has a significantly high source of income.

Competitive Landscape

The leading companies of Aircraft Leasing Market are AerCap, Air Lease Corporation, BOC Aviation, GECAS, BBAM LLC, CIT Commercial Air, Aviation Capital Group, Boeing Capital Corporation, Saab aircraft leasing, International lease finance corporation, Dubai aerospace enterprise, Chapman freeborn, Textron financial, General electric capital aviation services (Gecas), Nordic aviation capital, Avolon, Smbc aviation capital, Fly Leasing Limited and other prominent players.

Recent Development

Ø  March, 2020: AerCap Holdings N.V. announced it had signed an agreement with euroAtlantic Airways, a chief provider of ACMI services as well as charter aviation services, for the lease of two used Boeing 787-8 aircraft. The aircraft are scheduled to deliver in the spring of 2021, and will be the first 787s to be based in Portugal.

Ø  October, 2019: Garuda Indonesia and GECAS have entered into a lease agreement for two 737-800 Boeing-converted freighters (BCF). The passenger-converted aircraft are slated to be phased in mid-2020 and will provide additional capacity to Cargo Garuda Indonesia, the Indonesian National carrier’s strategic business unit with three freighters currently in use.

Scope of the Report

 By Leasing Type

Ø  Wet Leasing

Ø  Dry Leasing

By Aircraft Type

Ø  Narrow-body

Ø  Wide-body

Ø  Others

By Security Type

Ø  Asset-Backed Security (ABS)

Ø  Non-ABS

By Region:  

Ø  North America

Ø  Europe

Ø  Asia Pacific

Ø  Latin America

Ø  Middle East & Africa

The objective of the Study:

Ø  To analyze and forecast the global Aircraft Leasing Market size of the market in terms of value.

Ø  To examine the careful market segmentation and forecast the market size, in terms of value, based on the region by segmenting.

Ø  The Global Aircraft Leasing Market segmented into five regions, namely, North America, Europe, Asia Pacific, Latin America, Middle East & Africa and their leading countries.

Ø  To outline, categorized, and forecast the global Aircraft Leasing Market based on the leasing type, aircraft type, and security type.

Ø  To examine competitive developments like technological advancement, services, and regulative framework within the global Aircraft Leasing Market.

Ø  To highlight the impact analysis of the factors affecting the market dynamics such as drivers, restraints, opportunities, and challenges.

Ø  To strategically profile the key players and comprehensively analyze their market shares along with detailing the competitive landscape for market leaders.

Key Opinion Participant

Ø  OEMs

Ø  Equipment/system suppliers

Ø  Potential investors

Ø  Key executive and strategy growth manager

Ø  End users

Ø  Government institutions

Ø  Consultancy firms