The Global Aircraft Leasing market is projected to reach the valuation of USD 473.6 million by the year 2026 by growing at a CAGR of 7.5% during the forecast period 2020-2026.
An aircraft lease is a contract between three parties: A lender (providing funds to the leasing company), the leasing company (owner of the aircraft), and the lessor (the operator). For the leasing company, its cost of capital must at least be covered by the rent it receives from the lessor.
The simplest way is to lease an aircraft from a leasing company. A contract is established between the lessee and the lessor over a tenor and at an agreed monthly rental fee. The aircraft remains on the lessor’s balance sheet, can be depreciated, and is generally paid by debt. The asset does not appear on the airline’s balance sheet. Lessors typically make monthly or quarterly lease payments. At the end of the contract – which is typically four to eight years – the airline returns the aircraft to the leasing company. This method offers the most flexibility to fleet adjustment for the airline. The possibility of adding a call option exists.
Increased airline revenues, liquidity flexibility in global capital markets, and relatively low oil prices help create a favorable climate for the aviation leasing industry. The fact that recent bankruptcies by airlines have not had a significant detrimental impact on the sector further indicates resiliency. Some of the aircraft impacted are noticed instantly and issued to other airlines. Although air transport is a cyclical business, the cycle’s dominant growth phase seems more protracted than in the past and shows no signs of slowing down, and the industry remains attractive to investors.
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Provides flexibility for aircraft operations
Aviation works in a highly regulated business environment of which compliance with its regulations is of paramount importance. Maintenance is vital to safety, and all other activities from financing to catering are essential to the final consumer product, a contract of carriage sold as a flight ticket. While numerous older airlines were government-owned at some point, this has shifted through liberalization dramatically, especially in the mature markets (North America and Europe). In emerging economies, the role of government-controlled airlines is still significant and even dominant in the fast-growing Middle East regions.
Increasing Commercial Aircraft Leasing
Aircraft leasing for commercial purposes is increasing day by day as more people prefer to travel by airplane than any other mode of transportation. With the value of the commercial leased aircraft asset portfolio projected to hit USD 502 billion by 2024, commercial aircraft leasing is undoubtedly a standard option for operators seeming to expand their fleets to meet growing traffic demands. These operators traditionally purchased their planes, but now are increasingly turning to operate leases instead. It’s a gentle balance of determining which aircraft will maintain their value and maintaining the risks of ownership.
The leading companies of Aircraft Leasing Market are AerCap, Air Lease Corporation, BOC Aviation, GECAS, BBAM LLC, CIT Commercial Air, Aviation Capital Group, Boeing Capital Corporation, Saab aircraft leasing, International lease finance corporation, Dubai aerospace enterprise, Chapman freeborn, Textron financial, General electric capital aviation services (Gecas), Nordic aviation capital, Avolon, Smbc aviation capital, Fly Leasing Limited and other prominent players.
- March, 2020: AerCap Holdings N.V. announced it had signed an agreement with euroAtlantic Airways, a chief provider of ACMI services as well as charter aviation services, for the lease of two used Boeing 787-8 aircraft. The aircraft are scheduled to deliver in the spring of 2021, and will be the first 787s to be based in Portugal.
- October, 2019: Garuda Indonesia and GECAS have entered into a lease agreement for two 737-800 Boeing-converted freighters (BCF). The passenger-converted aircraft are slated to be phased in mid-2020 and will provide additional capacity to Cargo Garuda Indonesia, the Indonesian National carrier’s strategic business unit with three freighters currently in use.
Scope of the Report
|Years Considered||Historical data – 2016-2019
Base Year – 2019
Forecast – 2020 – 2026
|Facts Covered||Revenue in USD Million|
|Market Coverage||U.S, Canada, Germany, UK, France, Italy, Spain, Brazil, Mexico, Argentina, Japan, South Korea, China, India, UAE, South Africa, Saudi Arabia|
|Product/Service Segmentation||By leasing type, Aircraft type, Security type with Region.|
|Key Players||AerCap, Air Lease Corporation, BOC Aviation, GECAS, BBAM LLC, CIT Commercial Air, Aviation Capital Group, Boeing Capital Corporation, Saab aircraft leasing, International lease finance corporation, Dubai aerospace enterprise, Chapman freeborn, Textron financial, and other prominent players.|
By Leasing Type
- Wet Leasing
- Dry Leasing
By Aircraft Type
By Security Type
- Asset-Backed Security (ABS)
- North America
- Asia Pacific
- Latin America
- Middle East & Africa
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