Commercial Aircraft Leasing Market to Grow by USD 20.93 Billion (2024-2028), Driven by Strong Positions of Irish and Chinese Lessors, with AI Driving Market Transformation - Technavio

NEW YORK, Nov. 19, 2024 /PRNewswire/ -- Report with the AI impact on market trends - 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 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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Key Market Trends Fueling Growth

The aircraft leasing market is a significant segment of the aviation industry, with lessors and lessees playing key roles. Airlines, both full-service and low-cost, rent jets from lessors for various reasons, including fleet expansion, airline failures, and economic growth. Leasing allows aircraft owners to generate rental income while providing airlines with flexibility in ownership and branding. Trends in the market include the use of Sustainable Aviation Fuel, NextGen aircraft, and green initiatives. Pratt & Whitney, Aercap, and other major stakeholders are investing in fleet modernization and airport infrastructure. Aircraft types, including narrow body, wide body, and regional aircraft, are leased based on lease types like wet, damp, and dry. Maintenance and operation costs are crucial considerations. Aircraft leasing companies offer short-term and long-term leasing options for various aircraft, catering to aerospace manufacturing and air travel needs. The market is impacted by factors like fuel price, air passenger traffic, air freight, and urban air mobility. Passenger safety, aircraft maintenance market, and unmanned aerial mobility are critical challenges. Despite the challenges, the aircraft leasing market continues to grow, offering investment opportunities in the aviation sector. 

Commercial aircraft leasing market is influenced by various factors, including taxes imposed by governments. VAT taxes, in particular, significantly impact the industry. The extent of this impact depends on the operational characteristics of the carrier. In certain cases, the exemption of VAT taxes reduces the financial burden on aircraft lessors. For instance, Norway and Switzerland offer conditional VAT exemptions. European Union member states, under the European Union Directive 148, provide 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 aim to encourage market growth. 

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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 carriers, are major stakeholders in this market. Challenges include airline failures, economic downturns, and the impact of branding and color on lessees' preferences. Sustainable Aviation Fuel and green initiatives are becoming essential considerations. Lessors face challenges in managing aircraft storage during air travel downturns, such as lockdowns. Maintenance and operation costs are crucial factors, with major players like Aercap leading the way. Lease types include wet, damp, and dry, with short-term and long-term options. New airlines and fleet expansion, NextGen aircraft, and airport infrastructure are also critical challenges. Aircraft type, including narrow body, wide body, and regional aircraft, as well as fuel price and aircraft deliveries, are ongoing concerns. The aircraft leasing market is dynamic, with urban air mobility, passenger safety, and the aircraft maintenance market offering new investment pockets. Unmanned Aerial Mobility is an emerging trend. Critical challenges include maintaining passenger safety, managing maintenance costs, and adapting to changing market conditions.
• The commercial aircraft leasing market has experienced notable improvements due to the decrease in fuel prices since 2008. Crude oil prices, a significant factor in aviation fuel costs, have seen a substantial decline. In July 2008, crude oil was priced at approximately USD147 per barrel, whereas in July 2020, the price dropped to around USD20 per barrel. The price is projected to reach USD75 per barrel by 2022, despite occasional fluctuations. This downward trend in crude oil prices has led to a decrease in aviation fuel costs, allowing airlines to enhance their profit margins.

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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- The narrow-body aircraft segment is experiencing significant growth in the commercial aircraft leasing market. With a substantial market share, this segment is characterized by its operational efficiency and versatility, making it popular for short- to medium-haul flights. Narrow-body aircraft, such as the Airbus A320 and Boeing 737 families, are ideal for low-cost carriers and point-to-point travel due to their single aisle design and capacity to accommodate between 100 to 230 passengers. Factors driving this segment's growth include the increasing demand for air travel, particularly in emerging markets where low-cost carriers are expanding rapidly. Leasing narrow-body aircraft offers airlines operational flexibility, enabling them to adjust their fleets to meet seasonal demand without the financial burden of purchasing aircraft. Additionally, these aircraft are more fuel-efficient and have lower operating costs compared to wide-body models, making them an attractive option for cost-conscious airlines. In summary, the narrow-body aircraft segment is poised for continued growth within the global commercial aircraft leasing market due to rising air travel demand, operational flexibility, and cost efficiency.

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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, acquire new or used aircraft and lease them to lessees, typically airlines, for a specified period. Leasing allows airlines to obtain aircraft without the upfront capital cost of purchasing, enabling them to focus on their core business of operations. Aircraft types include narrow body, wide body, and regional jets, leased by full-service airlines, low-cost carriers, and regional operators. Lease types include wet lease, damp lease, and dry lease, which vary in the level of crew and maintenance provision. Aircraft storage and maintenance costs are significant considerations for lessors, particularly during airline failures or prolonged grounding. Aercap, a leading global aircraft leasing company, plays a significant role in the market, providing flexible financing solutions to airlines worldwide.

Market Research Overview

The aircraft leasing market is a significant segment of the aviation industry, where lessors own and lease aircraft to airlines and other lessees. Leasing allows airlines to acquire jet planes without the upfront cost of purchasing an aircraft outright. The market caters to various aircraft types, including narrow body, wide body, and regional jets, used for scheduled commercial traffic, low-cost carriers, and new airlines. Economic growth and passenger air traffic drive the demand for fleet expansion and modernization. Lessors offer lease types such as wet, damp, and dry lease, with varying levels of maintenance and operational responsibilities. The market faces challenges like airline failures, low-cost airlines' pressure on lease rates, and the impact of fuel prices. Sustainable initiatives like Sustainable Aviation Fuel (SAF) and green initiatives are gaining traction. Maintenance and operation costs are major concerns for lessors and lessees. Companies like Aercap dominate the commercial aircraft leasing sector, with short-term and long-term leasing options. The market is influenced by key factors such as aircraft deliveries, airport infrastructure, and aircraft storage. The leasing market also includes major stakeholders like Pratt & Whitney, Rolls-Royce, and GE Aviation. The market is also influenced by critical challenges such as carbon emissions, passenger safety, and the impact of lockdowns on air travel. The rise of urban air mobility and unmanned aerial mobility presents new investment pockets and opportunities. In conclusion, the aircraft leasing market plays a crucial role in the aviation industry, offering flexible solutions for aircraft ownership and enabling the growth of airlines and the aviation sector as a whole.

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