The global aircraft leasing market size is anticipated to touch US$ 62,221.8 million by 2023, as per a brand-new market report by Market Research Future (MRFR). It can grow at a 4.75 per cent CAGR from 2017 to 2023 (forecast period). The swelling in air travellers is likely to augur market demand over the forecast period. According to the International Air Transport Association (IATA), this number can touch 7.8 billion by 2036 and airline operators require the services of lessors to keep up with the demand. International and domestic courier companies have also partnered with aircraft leasing companies to complete timely deliveries.
The recent spate of terrorist attacks has spiked up aircraft leasing market demand dramatically. Upcoming tax regulations and new leasing policies by various countries can slow down the market growth in the coming years. But investments by banks, financial institutions, and the jobs created by the sector is expected to culminate into a bullish growth rate for the aircraft leasing market till the end of the forecast period.
Major lessors operating in the aircraft leasing market comprise AerCap, GECAS, Aviation Capital Group, SAAB Aircraft Leasing, Air Lease Corporation, CIT Commercial Air, International Lease Finance Corporation, Boeing Capital Corporation, BBAM, BOC Aviation, and others. The change in interest rates may lead to selling of shares of divestment of leasing units to reduce overleveraged debts of airline operators. Expansions, partnerships, and collaborations are strategies employed by these players to gain a competitive edge in the market.
In August 2018, Avolon, an Irish firm, has opened up shop in Dublin, Ireland. Although it caters to a large client base spanning over 160 countries, it has decided to return to its roots in Ireland, which is home to various leasing companies. In September 2018, Air Asia has decided to purvey its aircraft leasing division to BBAM Partnerships for US$ 151.5 million. Companies are expanding to new regions such as India and China owing to the growing numbers in the middle class.
The aircraft leasing market covers investment opportunities across the following regions – Asia Pacific (APAC), North America, Europe, and Rest-of-the-World (RoW).
The Europe aircraft leasing market can dominate till the end of the forecast period thanks to the presence of various leasing companies and resurgence of economies. Ireland can contribute the maximum to the aircraft leasing market, owing to being home to more than 15 global lessors. The 9/11 incident was the major catalyst in fueling leasing activities to nearly 40 per cent in 2014. Its attractive tax policies and the affordable lease rate offered in addition to maintenance, repair, and overhaul (MRO) services make it a prime destination.
The APAC region was the second-largest after Europe owing to the emergence of various startup firms in China, India and Malaysia. China has reportedly funded close to US$ 261 billion in the aircraft leasing market to capitalise on the growing sector. Competitive tax policies floated by Singapore and Hong Kong are likely to offer tough competition to the Europe market in the coming years. Rising fuel prices are an obstacle faced by these companies but the steadfast growth rates of economies is likely to counter this trend.
AerCap Holdings and Air Lease are upgrading their air fleet to keep up with their commitments. The healthy credit ratings of these firms coupled with the incoming cash flows for operations is likely to keep these firms afloat and the aircraft leasing equipment buoyant in the coming years.