Commercial Aircraft Leasing Market size is set to grow by USD 19.45 billion from 2023-2027, Strong market position of Irish and Chinese lessors boost the market, Technavio

NEW YORK, July 15, 2024 /PRNewswire/ -- The global commercial aircraft leasing market size is estimated to grow by USD 19.45 billion from 2023-2027, according to Technavio. The market is estimated to grow at a CAGR of 9.48% during the forecast period. Strong market position of irish and chinese lessors is driving market growth, with a trend towards influence of taxes on aircraft leasing. However, fall in the price of crude oil poses a challenge. Key market players include AerCap Holdings N.V., Air Lease Corp., Aircastle Ltd., ALAFCO Aviation Lease and Finance Co., Avolon Aerospace Leasing Ltd., Bank of Communications Co. Ltd., BBAM US LP, BOC Aviation Ltd., China Aircraft Leasing Group Holdings Ltd., Deucalion Aviation Ltd., Dubai Aerospace Enterprise (DAE) Ltd., Macquarie Group Ltd., Orix Corp., Saab AB, and Tokyo Century Corp..

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Market Driver

Commercial aircraft leasing market is influenced by various factors, including taxes. Governments impose taxes like Value-Added Tax (VAT) based on the operational characteristics of carriers. VAT exemptions can lessen the burden on lessors, encouraging market growth. For instance, Norway and Switzerland offer conditional VAT exemptions. European Union member states provide VAT exemptions for Jet A-1 fuel purchases for charter flights. Channel Islands of Jersey and Guernsey offer complete VAT exemptions. Belgium and France have provisions for operators with more than 80% international flights to avail VAT exemptions. These exemptions significantly reduce tax burdens and are expected to continue promoting market growth over the forecast period. 

The commercial aircraft leasing market is experiencing significant growth, driven by increasing air passenger traffic and the need for aerial solutions in various sectors. Air freight and emergency services are key areas of focus, with lessors providing cost-effective alternatives for aircraft operators, including dry leasing. The aviation sector is also investing in new aircraft deliveries to meet capacity demands, with infrastructure and maintenance markets playing crucial roles. Air safety standards remain a top priority, influencing feasibility studies and financial burdens. Emerging markets and low-cost aircraft carriers are also contributing to the market's expansion. However, factors like fuel prices, regulatory compliance, and environmental impact pose challenges. ICAO and commercial aviation regulations continue to shape the industry landscape. Fleet management, aircraft flying hours, and manufacturing are essential aspects of this dynamic market. 

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Market Challenges

• The decline in crude oil prices since 2008 has led to substantial savings for airlines on fuel expenses. With crude oil prices dropping from around USD147 per barrel in July 2008 to USD20 per barrel in July 2020, and expected to reach USD75 per barrel in 2022, aviation fuel prices have also decreased. This cost reduction has enabled airlines to boost their profit margins, prompting some to purchase aircraft instead of leasing them. In 2021, Airbus reported a significant increase in sales, with 771 new orders, including 64 for the A220 and 661 for the A320neo Family. Airbus' backlog reached 7,082 aircraft at the end of 2021. However, this downward trend in crude oil prices may negatively impact the growth of the global commercial aircraft leasing market during the forecast period.
• The commercial aircraft leasing market plays a significant role in the commercial airline industry, providing a cost-effective alternative to purchasing aircraft outright. However, challenges persist. Capacity demands and capital outflow are key concerns for lessors. Regulatory compliance, including commercial aviation regulations from ICAO, adds to the financial burden. Dry leasing, short-term and long-term, caters to various needs. Emerging markets and freight transportation present growth opportunities. However, challenges like fuel price volatility, raw material supply, and technological solutions for environmental impact remain. Safety, passenger traffic, and fleet feasibility studies are crucial. Leasing commercial aircrafts also supports emergency services and mobility services. Low-cost aircraft and carriers, as well as UAM solutions like urban air mobility and unmanned aerial mobility, are emerging trends. Cost-effective alternatives like wet leasing and mobility on demand, along with vehicle integration, are shaping the future of transportation efficiency. Fatalities and volume of freight are critical factors in feasibility studies. The market's feasibility depends on balancing these challenges and opportunities.

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Segment Overview 

This commercial aircraft leasing market report extensively covers market segmentation by

1. Product 
• 1.1 Narrow-body aircrafts
• 1.2 Wide-body aircrafts
• 1.3 Regional aircrafts
2. Type 
• 2.1 Wet lease
• 2.2 Dry lease
3. Geography 
• 3.1 APAC
• 3.2 Europe
• 3.3 North America
• 3.4 South America
• 3.5 Middle East and Africa

1.1 Narrow-body aircrafts- Narrowbody aircraft, featuring a single aisle cabin with passengers seated in two rows, are popular among efficiency-focused airline carriers in both emerging and developed economies. These aircraft, equipped with twin-engine setups integrated into their wings, provide essential thrust. The demand for these aircraft is significant due to their ability to enhance profitability for airlines, influenced by average load factors and seasonality. Low-cost carriers (LCCs) are continually modernizing their fleets to capitalize on new market opportunities and maintain competitiveness. The growth of the global commercial aircraft leasing market for narrowbody aircraft is anticipated to increase due to the rising tourism sector and the expanding personal jet leasing industry.

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Research Analysis

The aircraft leasing market plays a crucial role in the commercial airline industry by providing a cost-effective alternative for airlines to acquire and operate aircraft. Aircraft deliveries continue to increase, driven by growing air travel demand and infrastructure development. Aircraft maintenance is a significant market, ensuring air safety standards are met and aircraft flying hours are maximized. Emerging markets and low-cost carriers are driving growth in the sector. ICAO regulations and commercial aviation regulations set the framework for aircraft operations. Aircraft infrastructure development and manufacturing are key areas of investment. Dry leasing, where the lessor retains ownership and responsibility for maintenance, is a popular option. Emergency services and mobility on demand are new areas of focus, while environmental impact and fatalities remain critical concerns. Feasibility studies are essential to assess market potential and profitability. The aircraft leasing market is dynamic, influenced by factors such as airline financial performance, fuel prices, and technological advancements.

Market Research Overview

The commercial aircraft leasing market plays a crucial role in the aviation sector, providing a cost-effective alternative for airlines to acquire and operate aircraft without the significant capital outflow of purchasing them outright. The market caters to various sectors, including air passenger traffic and air freight, offering dry and wet leasing options. Capacity expansion in emerging markets and the need for aircraft infrastructure upgrades are driving demand for new deliveries and maintenance services. Air safety standards and commercial aviation regulations are key considerations for lessors and operators. The market's growth is influenced by factors such as air travel volume, fuel prices, and technological solutions. Aircraft leasing is also essential for emergency services, mobility on demand, and urban air mobility (UAM) solutions. The market's feasibility is influenced by factors like raw material supply, manufacturing capacity, and the environmental impact of aviation. The aircraft leasing market interacts with various stakeholders, including airlines, aircraft operators, airplane manufacturers, and aviation authorities like ICAO. The market's growth is expected to continue as air travel demand increases, and new technologies like UAM solutions and unmanned aerial mobility (UAM) gain traction. The market's volume of freight and passenger traffic, as well as the efficiency of transportation, are essential factors influencing its growth. The aircraft leasing market's investment pockets include capacity expansion, fleet modernization, and the integration of vehicles for mobility services.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Product
• Narrow-body Aircrafts
• Wide-body Aircrafts
• Regional Aircrafts
• Type
• Wet Lease
• Dry Lease
• Geography
• APAC
• Europe
• North America
• South America
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio