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.

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