The Global Commercial Leased Aircraft Asset Portfolio Value is Projected to Reach US$502 Billion by 2024
Growth
of Low Cost Airline Carriers & Increasing Air Travel Drive the Global Commercial
Aircraft Leasing Market, According to New Report by Global Industry Analysts, Inc.
GIA launches comprehensive analysis of industry
segments, trends, growth drivers, market share, size, and demand forecasts on
the global Commercial Aircraft Leasing market. The global Commercial Leased Aircraft Asset Portfolio Value is projected
to reach US$502 billion by 2024, driven by increasing air
travel, and the rise of Low Cost Carriers (LCCs) around the world especially in
developing markets such in Asia.
Purchasing an aircraft is an expensive affair and the
long awaiting periods typically associated with their acquisition also makes
buying aircraft an unattractive option for airline operators. Also, not all
airline companies can afford to fund full expenses of aircraft purchases.
Therefore, airline operators have been eagerly exploring the option of leasing
aircraft instead of purchasing the same. Aircraft leasing allows airline
operators an economical alternative that allows cost to be spread across many
years, enabling airlines to fly at a relatively economical price. Purchasing
aircraft demands huge dedicated capital outlay, which most of airline
operators, especially low cost carriers can ill afford.
Also by eliminating the need to earmark huge capital
for purchasing aircraft, aircraft leasing allows airline operators to have
substantial cash flow to easily manage their operating expenses. Aircraft
Leasing provides high level of flexibility at fleet level for airline
companies. The model enables airline operators to judiciously maintain the size
of their aircraft fleet as per the prevailing
demand. For instance, an airline company serving a route on which air travel is
set to increase due to establishment of new industry or sudden boom in tourism,
can immediately gear up by leasing additional aircraft for that route without
having to worry about heavy investments. On the contrary, if air travels on a
route declines either due to major companies exiting from the location or due
to the place losing its flavor as a tourist hotspot, the airline can also
easily disengage few leased aircraft from service and arrange for their early
return to lessors with minor penalty payments.
Rapid expansion of the middle class population in
developing countries is creating dynamic changes in the population’s ability to
travel thus significantly influencing the growth in airline passenger traffic.
With fast growing middle class population, developing economies in Asia, Latin
America, and the Middle East are growing at a healthy pace, while North America
and Europe are witnessing low growth rates, albeit on a higher base. Riding on
the wave of increasing air travel, especially in emerging markets, the duopoly
of Airbus and Boeing have been producing record number of aircraft each year.
With the success of their new aircraft, these manufacturers have been ramping
up production of newer aircraft, while rationalizing production of older
aircraft. Both
lessors and airlines have been able to access credit from capital markets as
well as banks at near zero interest rates. Despite growing deliveries of
aircraft, the current backlog of aircraft bookings translates to about 9 to 10
years of production at current production rates, implying a shortage of
available aircraft. The situation is leading to a healthy placement rate for
aircraft lessors, guaranteeing safe returns, and generating easy access to
credit.
Low Cost Carriers (LCCs) have evolved into key
participants in modern air transport industry. The tremendous success of LCC
model and emergence of several new LCCs offering cheaper air fares, thanks to
their low cost business models and focus on basic needs have revolutionized the
aviation sector.
Several low cost carriers have established new
services on new routes. These carriers lack the financial muscle for aggressive
fleet expansion strategies and find leasing as the most affordable and
pragmatic fleet acquisition strategy as it eliminates the need for upfront capital
expenditure.
As stated by the new market research report on Commercial Aircraft Leasing, Asia-Pacific
(including Japan) represents the largest market worldwide, followed by Europe. The
region is also forecast to witness the fastest growth with a CAGR of 9.3% over
the analysis period led by increasing air travel and growth of low cost
carriers (LCCs). In terms of aircraft type, narrow body aircraft continue to be
the preferred type given their versatility, and relatively fuel efficient
operations.
Key players in the market include AerCap Holdings
N.V., ALAFCO Aviation Lease and Finance Company KSCP, Aviation Capital Group
Corp., Avolon Aerospace Leasing Ltd, BBAM Aircraft Leasing & Management,
BCI Aircraft Leasing Inc., BOC Aviation Limited, Boeing Capital Corporation,
Dubai Aerospace Enterprise (DAE) Ltd., GE Capital Aviation Services, Macquarie
Aircraft Leasing Services, and SMBC Aviation Capital among others.
The research report titled "Commercial Aircraft Leasing: A Global
Strategic Business Report"
announced by Global Industry Analysts Inc., provides a comprehensive review of
market trends, growth drivers, innovations and launches, and strategic industry
activities of major companies worldwide. The report provides market estimates
and projections in US dollars in terms of Leased Asset Portfolio Value, as well
as Leased Aircraft Fleet in Operation in units for all major geographic markets
including the North America, Europe, Asia-Pacific, Middle East & Africa,
and Latin America. The report also provides market estimates and projections in
US dollars for Leased Asset Portfolio Value by Aircraft Type (Long Haul &
Medium Distance Aircraft, and Regional/Short Haul Aircraft) for the global and
regional markets.
Global Industry
Analysts, Inc. 6150 Hellyer Ave., San Jose CA 95138, USA, All Rights Reserved.
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