Global Aircraft Leasing Market Overview
Aircraft leasing is the practice of procurement of aircraft on lease from other airlines or leasing companies to operate aircraft without the financial burden of buying them, and to provide temporary increase in capacity. They can also be considered as a form of contract whereby the lessor provides minimum operating services such as aircraft, crew, maintenance and insurance (ACMI). Also, the lessee provides the balance of services along with the flight numbers. In all other forms of charter, the lessor provides the flight numbers. The procurer usually includes financial shareholders and reputed corporates. Procurement can also be done directly from the original equipment manufacturer (OEM) or it can be done from the companies who are in the business of leasing aircrafts. Various safety and legal agencies will make sure that they maintain the planes well and they lease aircraft for long time.
Aircraft leases are controlled by the Federal Aviation Administration (FAA) as per the Federal Aviation Regulations (FARs). The FAA categorizes aircraft leases as either dry leases or wet leases. Inside a dry lease, the aircraft owner provides only the aircraft and no crew member is included. If at least one crew member is provided in the lease arrangement, it becomes a wet lease as defined in the FARs. A wet lease is an exception to the simple definition of a lease because it does not involve transferring ownership of the aircraft. The lessor maintains operational control of the aircraft under a wet lease.
Market Size & Forecast
The global aircraft leasing market is estimated to grow at a CAGR of around 5% over the forecast period i.e. 2019-2027. The aircraft leasing market is expected to maintain a steady growth rate during the forecast period attributed to the rise in low cost aircraft carriers. Another factor known to have strengthened the market demand includes set up of supportive commercial aviation rules, increase in the number of air passengers in tandem with the volume of freight transported. On the basis of leasing type, aircraft leasing market is segmented into dry and wet leasing. Out of which, dry segment is expected to witness major market share as dry leasing leads to the reduction in expenditure for training personnel and aircraft maintenance, it is contributing majorly to market growth.
The Government awarded more than 300 routes to airlines and helicopter operators under RCS-2 in January, 2018. Whilst being largely regional in focus greater connectivity will also feed additional passengers to the larger aviation centres creating a need for larger aircraft types. With the increase in the number of these new routes also expected to grow aircraft leasing market.
Lease rates for an aircraft depends upon its age, lease terms, and creditworthiness of an airline, besides the demand. Globally passenger demand continues to be on rise and lessors have not encountered difficulty in placing the used NG aircraft with carriers. According to the International Air Transport Association (IATA), the air travel industry has a long-term annual growth rate of 5.5%. Boeing, the plane manufacturer, expects air traffic growth of more than 4.5% per year over the forecast period. It also predicts that the global fleet size will double. Rising incomes and a growing middle class in emerging markets will likely continue to be the biggest drivers of growth.
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Growth Drivers & Challenges
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Growing number of air passengers and increase in the volume of freight transported
Increase in the number of air passengers coupled with an increase in the volume of freight, and advancement in aircraft and airport infrastructure in less developed countries are some of the key factors likely to drive the growth of aircraft leasing market. Also, as leasing of aircraft provides tax and balance sheet advantages which is beneficial for the growth of aircraft leasing market.
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Increasing trade of industrial commodities
Developments concerning aircraft leasing industry include improvements in airport infrastructure in the developing economies, globalization and increased trade of industrial commodities. Moreover, low interest and lease rates along with the rising demand of low-cost carriers, falling crude oil prices, and ease of travel are some factors that drives the growth of aircraft leasing market.
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Government Regulations and Taxation Policies
The presence of stringent and vaguely defined leasing regulations and taxation policies are expected to hinder the growth of aircraft leasing market. Additionally, asset recovery risk that is associated with airline bankruptcy is also another factor that is likely to challenge the growth of aircraft leasing market.
Market Segmentation
Our-in depth analysis of the global aircraft leasing market includes the following segments:
By Leasing
- Wet Leasing
- Dry Leasing
By Aircraft Type
- Narrow Body
- Wide Body
By Airlines
- Top Tie
- Middle Credits
- New Entrants
- Others
By Revenue Sources
- Rents
- Asset Sales
By Region
On the basis of region, the aircraft leasing market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa.
North America aircraft leasing market is anticipated to witness fast growth attributed to the presence of various leasing companies and recovery of economies. Moreover, in North America, the U.S is expected to lead the global aircraft leasing market followed by Canada.
Europe is also expected to witness significant growth in the global aircraft leasing market during the forecast period on account of increase in the number of low cost aircraft carriers
Global aircraft leasing market is further classified on the basis of region as follows:
- North America (U.S. & Canada) Market size, Y-O-Y growth & Opportunity Analysis
- Latin America (Brazil, Mexico, Argentina, Rest of Latin America) Market size, Y-O-Y growth & Opportunity Analysis
- Europe (Germany, UK, France, Italy, Spain, BENELUX, NORDIC, Hungary, Poland, Turkey, Russia, Rest of Europe) Market size, Y-O-Y growth & Opportunity Analysis
- Asia-Pacific (China, India, Japan, South Korea, Indonesia, Malaysia, Australia, New Zealand, Rest of Asia Pacific) Market size, Y-O-Y growth & Opportunity Analysis.
- Middle East and Africa (Israel, GCC (Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman), North Africa, South Africa, Rest of Middle East and Africa) Market size, Y-O-Y growth & Opportunity Analysis.
Top Featured Companies Dominating the Market
- GE Capital Aviation Service
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- AerCap
- BBAM
- SMBC Aviation Capital
- ALAFCO Aviation Lease and Finance Company K.S.C.P
- Boeing Capital
- Air Lease Corporation
- ICBC Leasing
- Ansett Worldwide Aviation Services
- Other Prominent Players
