Commercial Aircraft Leasing Market to Grow by USD 20.93 Billion (2024-2028), Boosted by Strong Market Position of Irish and Chinese Lessors, AI Impact Report - Technavio

NEW YORK, Feb. 4, 2025 /PRNewswire/ -- Report on how AI is driving market transformation - The global commercial aircraft leasing market size is estimated to grow by USD 20.93 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  9.45%  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, Air Lease Corporation, Aircastle Ltd., ALAFCO Aviation Lease and Finance Company K.S.C.P, Ansett Worldwide Aviation Services, Avolon, BBAM, Bank of Communications Co. Ltd., China Aircraft Leasing Group Holdings Ltd., CIT Commercial Air, DAE Capital, Deucalion Aviation Ltd., GE Capital Aviation Service, ICBC Leasing, Macquarie Group Ltd., Nordic Aviation Capital, Orix Corp., SAAB Aircraft Leasing, Tokyo Century Corp.

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Market Driver

The aircraft leasing market is a significant segment of the aviation industry, with lessors and lessees engaging in leasing arrangements for various types of commercial aircraft. Airlines, both full-service and low-cost, are major stakeholders in this market, leasing jets to expand their fleets and meet passenger demand. Trends in the market include fleet modernization, sustainability initiatives like the use of Sustainable Aviation Fuel, and economic growth driving air travel. Lessors offer aircraft ownership to airlines, allowing them to rent jet brands and colors without the upfront cost of ownership. Lease types include wet, damp, and dry, with varying levels of maintenance and operational responsibilities. Aercap and other commercial aircraft leasing companies dominate the market, providing short- and long-term leasing options. Airline failures and low-cost carriers have impacted the market, leading to increased aircraft storage and airport infrastructure investments. Maintenance and operation costs, fuel prices, and aircraft type (narrow body, wide body, and regional) also influence market dynamics. Major challenges include carbon emissions, airport infrastructure, and aircraft operations, while green initiatives and NextGen aircraft offer potential solutions. The aircraft leasing market continues to evolve, with urban air mobility and unmanned aerial mobility emerging as new investment pockets. Passenger safety remains a critical concern, as does the aircraft maintenance market and the impact of lockdowns and air travel restrictions on aircraft deliveries. 

The Commercial Aircraft Leasing Market is influenced by various factors, including taxes imposed by governments. VAT taxes, in particular, significantly impact the market. The exemption or reduction of such taxes can lessen the financial burden on aircraft lessors. For instance, Norway and Switzerland offer conditional VAT exemptions. The European Union provides VAT exemptions for the purchase of Jet A-1 fuel for charter non-scheduled commercial and private non-revenue business flights. The Channel Islands of Jersey and Guernsey offer a complete VAT exemption. These tax policies encourage market growth and are essential considerations for aircraft leasing companies. 

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 Market Challenges

• The aircraft leasing market is a significant segment of the aviation industry, with lessors and lessees engaging in the rental of commercial jets. Airlines, both full-service and low-cost, are major stakeholders in this market, leasing aircraft to expand their fleets and meet passenger demand. Challenges include airline failures, low-cost carriers' pressure on rents, and the need for fleet modernization with sustainable aviation fuel and NextGen aircraft. Lessors face challenges like aircraft storage during air travel disruptions, maintenance and operation costs, and lease types like wet, damp, and dry. Aercap, Pratt, and other aircraft leasing companies play a crucial role in this market, with short-term and long-term leasing options. Economic growth, passenger safety, and green initiatives are key trends. Maintenance costs, operation costs, and fuel price are critical challenges. Urban air mobility and unmanned aerial mobility are emerging investment pockets.
• The decline in crude oil prices since 2008 has significantly impacted the commercial aircraft leasing market. With fuel being a major operating expense for airlines, the reduction in fuel prices has led to substantial savings. In July 2008, crude oil cost around USD147 per barrel, while in July 2020, it had dropped to approximately USD20 per barrel. The price is projected to reach USD75 per barrel in 2022. Despite price fluctuations, the overall trend shows a downward movement. This decrease in crude oil prices translates to lower aviation fuel costs, thereby increasing airline operators' profit margins.

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Segment Overview 

This commercial aircraft leasing market report extensively covers market segmentation by  

• 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
• Security
• Asset-Backed Security (ABS)
• Non-Asset Backed Security (Non-ABS)

1.1 Narrow-body aircrafts-  The narrow-body aircraft segment is experiencing significant growth in the commercial aircraft leasing market. This segment, which includes popular models like the Airbus A320 and Boeing 737 families, is characterized by its large market share. Narrow-body aircraft are ideal for short- to medium-haul flights, seating between 100 to 230 passengers, and offering operational efficiency and versatility. Driving this segment's growth are rising air travel demands, particularly in emerging markets where low-cost carriers are expanding. Leasing narrow-body aircraft offers airlines flexibility to adjust fleets based on seasonal demand without the financial burden of purchasing new aircraft. Additionally, these aircraft boast lower fuel consumption and operating costs compared to wide-body models, making them a cost-effective choice for airlines focused on minimizing expenses. In summary, the narrow-body aircraft segment's growth is fueled by increasing air travel demand, the need for operational flexibility, and cost efficiency. This trend is expected to continue within the global commercial aircraft leasing market during the forecast period.

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Research Analysis

The aircraft leasing market refers to the business of leasing commercial jet aircraft to airlines and other operators. Lessors, the aircraft owners, purchase or finance new or used aircraft and lease them to lessees, typically airlines, for a specified period. Aircraft types include narrow body, wide body, and regional jets, catering to the varying needs of full-service airlines and regional carriers. Lease types include wet, damp, and dry, differing in the level of crew and maintenance provision. Airline failures and subsequent aircraft storage are challenges for lessors, while aircraft operations and maintenance costs are significant considerations. Aercap is an example of a leading global aircraft leasing company.

Market Research Overview

The aircraft leasing market refers to the business of leasing commercial jet aircraft to airlines and other operators. Lessors, the aircraft owners, provide aircraft to lessees, typically airlines, under various lease types such as wet, damp, and dry. Aircraft leasing has become a popular alternative to aircraft ownership due to its flexibility and lower upfront costs. The market is driven by factors such as economic growth, fleet expansion, and airline failures. Low-cost airlines and budget carriers are major stakeholders, accounting for a significant portion of the leased fleet. Sustainable Aviation Fuel and green initiatives are gaining importance in the aviation industry. Pratt and other aerospace manufacturers supply the latest NextGen aircraft to meet the growing demand. Aircraft leasing companies offer short-term and long-term leasing options, catering to various needs. Maintenance and operation costs are critical challenges for lessors. The market is influenced by factors like passenger air traffic, airport infrastructure, fuel price, and aircraft type (narrow body, wide body, and regional). The aircraft leasing market is expected to grow, driven by urban air mobility, passenger safety, and the aircraft maintenance market. However, challenges include air travel restrictions due to lockdowns, manufacturing delays, and aircraft deliveries. Unmanned Aerial Mobility and investment pockets in emerging markets offer potential opportunities. Critical challenges include ensuring passenger safety, managing carbon emissions, and fleet modernization.

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
• Security
• Asset-Backed Security (ABS)
• Non-Asset Backed Security (Non-ABS)

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