Commercial Aircraft Leasing Market - By Aircraft type, By Lease Type, By Lease Duration, By Security type , By Aircraft Age, By Fleet type, By Geography Global Opportunity Analysis & Industry Forecast, 2024-2030

Commercial Aircraft Leasing Market Overview

Commercial Aircraft Leasing Market is forecast to reach $325 billion by 2030, after growing at a CAGR of 7.9% during 2024-2030. The growth of the commercial aircraft leasing market is attributed to the increasing air traffic volume. This leads to a corresponding increase in the need for aircraft to meet the demand which in turn, drives the demand for aircraft leasing. Additionally, the high capital costs associated with purchasing aircraft can make leasing a more attractive option for airlines. Leasing allows airlines to acquire aircraft without the need for large upfront capital expenditures which can improve their financial flexibility and reduce their overall risk. The modernization of the commercial fleet combined with government initiatives to boost the aviation sector is further expected to fuel the growth of the commercial aircraft leasing market.

One of the most significant trends in the airline industry is the shift towards sustainability. Airlines are investing in sustainable aviation fuels (SAFs) to reduce carbon emissions. As sustainability becomes a priority, leasing companies are aligning with airlines green initiatives by offering environmentally friendly aircraft options and promoting sustainable aviation fuel (SAF) usage. Another trend is the growing shift towards newer aircraft. Airlines are increasingly leasing fuel-efficient, new-generation aircraft to reduce operational costs and meet environmental standards. This demand drives leasing companies to focus on acquiring and leasing out more modern fleets like the Airbus A320neo and Boeing 737 MAX.

Commercial Aircraft Leasing Market - Report Coverage:

The “Commercial Aircraft Leasing Market Report - Forecast (2024-2030)” by IndustryARC, covers an in-depth analysis of the following segments in the Commercial Aircraft Leasing Market.

COVID-19 / Ukraine Crisis - Impact Analysis:  

• The COVID-19 pandemic had a substantial and lasting impact on the commercial aircraft leasing market. Widespread travel restrictions and lockdowns caused a sharp decline in air travel demand, forcing airlines to ground aircraft.  Airlines faced a dramatic decline in revenue, leading to a significant reduction in demand for leased aircraft. Reduced demand was because the airlines cut their operation expenses by either giving back the leased airplanes or negotiating to have better lease deals. This led to oversupply of planes for lease, and this resulted in a situation where lease rates were dropping.
• The full-scale Russian invasion of Ukraine in February 2022 had an immediate impact on various sectors, including civil aviation. Russian airlines were forced to return their leased aircraft, which amounted to nearly their whole fleet, when flights to Western destinations were drastically cut. The EU and US sanctions prohibit the supply of aircraft and components to Russian entities or for use in Russia. In response to western countries sanction, Russia has responded by acquiring seized aircraft, developing domestic production, and expanding domestic routes.

Key Takeaways:

Europe Dominates the Market

Europe held the major share of 35% in commercial aircraft leasing market. Ireland and the United Kingdom have emerged as key players in the European commercial aircraft leasing market, driven by favorable tax policies and strategic location. According to CAPA, Europe boasts a significant leased fleet, accounting for 63% of its total aircraft, which is the highest proportion globally. AerCap, a major aircraft leasing company, has leased two Airbus A321 passenger jets to Swiftair, a Spanish cargo airline. These jets will be converted into cargo planes by EFW in Singapore. The converted aircraft will be delivered to Swiftair in April and June 2024. 

Narrow Body Aircrafts are the Largest Segment

The commercial aircraft leasing market can be segmented based on the type of aircraft being leased. Narrow-body aircrafts segment is expected to hold the largest share of the commercial aircraft leasing market. According to the Centre for Aviation fleet database, leasing accounts for 58% of narrowbodies and regional jets. These are smaller, single-aisle aircraft such as the Boeing 737 and Airbus A320 used for short routes. According to Boeing’s 2023 Commercial Market Outlook (CMO), Boeing forecasts demand for 42,600 new commercial jets over next 20 years. Also, in the 20-year forecast period, Boeing anticipates demand for the new single-aisle airplanes to account for more than 75% of all new deliveries and totaling more than 32,000 airplanes. 

Dry Leasing is the Largest Segment

Dry leasing has become the go-to choice in the commercial aircraft leasing world for several reasons, especially because of its flexibility, cost-effectiveness, and ability to manage risks for both airlines and lessors. According to AERCAP’s factsheet, nearly half of the world's commercial aircraft fleet is now leased. In fact, the number of planes on operating leases has more than tripled in the last two decades. With a dry lease, the lessor supplies only the aircraft itself. The airline takes on the responsibility for everything else such as crew, maintenance, insurance, and meeting regulatory requirements. This setup works well for airlines, giving them the freedom to tweak their fleet based on seasonal demand, new routes, or business growth. It means they have more control over how they operate, allowing them to adjust the aircraft to fit their specific needs, comply with local regulations, and meet labor contracts. Therefore, flexibility in terms of the duration and the ability to configure the aircraft to meet specific operational needs with lower lease rates drives the demand for dry lease in commercial aircraft leasing market.

Benefits of Leasing Drives the Market

Aircraft leasing is a favored option in the aviation industry because it provides numerous advantages to individuals, airlines, and businesses. According to AerSale, leased aircraft account for well over 40% of the global fleet.  Airlines find it more affordable to lease an aircraft because it gives them the opportunity to utilize a plane without having to pay the high initial expenditures of buying. This is especially beneficial for businesses seeking efficient management of capital expenses. Operating leases offer flexibility due to their short-term nature allowing for adjustments to changing operational needs. This flexibility enables upgrading to newer planes and modifying fleet size without long-term commitments. Leasing also provides access to modern, advanced aircraft without the upfront costs of ownership. This is crucial for maintaining an efficient fleet. Furthermore, lease payments are predictable and budget-friendly, helping in effective cash flow management.

Volatility to Hamper the Growth

The aviation industry is a system that is affected by various factors. Some of the most notable ones are geopolitical risks and adversities, and health risks and adversities including the current pandemic namely COVID 19. Sanctions and quotas distort markets and supply chains, reduce access to markets and ability to get information, as an example of the U.S.-China airplane trade war implied the higher tariffs on airplanes and their parts delivery between the countries. Civil unrest in certain regions results to restricted air space, flight rerouting, and bumping up security measures, which are detrimental to the operations of airline companies and travelers’ trust. Also, due to COVID-19 pandemic effects, governments around the world had to close borders, impose quarantines, and require tests from travelers. Such measures have resulted in the reduction of the demand for air travel. The combined impact of these factors has brought many airlines into the edge of their collapse and those that have fallen into the category of bankrupt companies. This has resulted into loss of employment, reduction in flight schedules and general disruption of air transport.

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Key Market Players: 

Product/Service launches, approvals, patents and events, acquisitions, partnerships, and collaborations are key strategies adopted by players in the Commercial Aircraft Leasing Market. The top 10 companies in this industry are listed below:

1.  AerCap Holdings N.V.
2. Dubai Aerospace Enterprise
3. BBAM Aircraft Leasing & Management
4.  SKY Leasing
5.  Nordic Aviation Capital (NAC)
6.  BOC Aviation Limited
7. Avolon Holdings Limited
8. SMBC Aviation Capital
9. Air Lease Corporation (ALC)
10. AVIAM Leasing

Scope of the Report: 

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