Commercial Aircraft Leasing Market Analysis APAC, Europe, North America, South America, Middle East and Africa - US, China, Japan, Germany, France - Size and Forecast 2023-2027

Commercial Aircraft Leasing Market Forecast 2023-2027

The Commercial Aircraft Leasing Market size is estimated to grow by USD 19.45 billion at a CAGR of 9.48% between 2022 and 2027. The strong market position of Irish and Chinese lessors, known for their large aircraft fleets and global reach, is contributing to market growth by providing a wide range of leasing options to airlines worldwide. The aggressive market expansion strategies of Low-Cost Carriers (LCCs), which often rely on leasing to quickly expand their fleets and enter new markets, are also driving demand for leased aircraft. Additionally, this is seen as an affordable option compared to buying, especially for airlines looking to manage their fleet costs and reduce financial risk, further fueling market growth.

It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

What will be the size of the Market During the Forecast Period?

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Market Segmentation

This report extensively covers market segmentation by product (narrow-body aircraft, wide-body aircraft, and regional aircraft), type (wet lease and dry lease), and geography (APAC, Europe, North America, South America, and Middle East, and Africa).

By Product 

The narrow-body aircrafts segment will account for a major share of the market's growth during the forecast period. They have a single aisle inside the cabin, and the passengers are seated in two axial groups. They've got a two-engine configuration that is attached to the wings, providing thrust.

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The narrow-body aircrafts segment was valued at USD 10.48 billion in 2017. In developing and advanced economies, where the historical load factor and seasonal significance are crucial for defining their profit margins, demand for these is determined by efficient operations carried out by air carriers. Increasing tourism with high demand for personal jet leasing will drive the growth of the segment in the global market during the forecast period.

Moreover, widebody aircraft are designed to incorporate two or more passenger aisles within the fuselage, resulting in a seven-seater configuration. They offer high efficiency, better passenger comfort, and more space for cargo. A widebody plane offers passengers a premium class of service. Though the demand for widebody is lower than for narrowbody aircraft, dominant market players offer a considerable number of variants in large widebody aircraft. The introduction of a fuel-efficient design, more spacious windows, a quieter cabin, and the most recent in-flight entertainment and connectivity systems will drive the growth of the segment in the market during the forecast period.

By Type 

Based on type, the market has been segmented into wet lease and dry lease. The wet-lease segment will account for the largest share of this segment. A wet lease is a legal agreement where the lessor provides aircraft, crew, maintenance, and insurance services (ACMI) to the lessee. The agreement is therefore called ACMI leasing. The expenses arising during the flight operations, including fuel prices, airport charges, duties, and taxes, have to be paid by the lessee as part of this type of leasing. The major incentives for airlines to enter agreements with lessors are the maintenance and insurance features. In addition, wet leasing offers the scope to extend airline operations into regions where airlines do not have legal permission to operate under their own name. The developments will aid the growth of the wet leasing segment in the market during the forecast period.

Dry leasing is a contract where lessors offer aircraft on lease to lessees without the provision of added services, such as insurance, maintenance, ground staff, or crew. On average, a dry lease agreement lasts more than two years. In the case of depreciation, maintenance, and insurance, it may also be subject to certain conditions. A dry lease agreement between a large air carrier and a small airline can also be concluded. In such a case, the major airline provides these to the regional operator. The latter operates this with its crew on behalf of the former. In the case of a major airline, this leads to considerable cost savings. A significant amount of interest has been shown in dry leasing worldwide. Governments and regulatory agencies are revising their existing policies to favor their respective domestic aviation industries. However, some strict legislation associated with dry leasing might affect its popularity to some extent.

By Region

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APAC is estimated to contribute 43% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. With the success of the LCC business model, APAC is recording steady growth in air travel. APAC is anticipated to account for approximately half of the global air passenger traffic in the next two decades. Furthermore, fleet operators in this region are increasing their demand for energy-efficient jets. Fleet operators are looking for ways to do this by retrofitting older ones with new, more advanced ones. Such trends have opened immense opportunities for companies to offer their services in the region with a competitive pricing strategy. Furthermore, APAC has been witnessing high growth in the global aviation industry and is anticipated to drive the industry during the forecast period. This is increasing the flow of investments in the aviation industry in this region.

Market Dynamics and Customer Landscape

The market is witnessing significant growth due to the increasing demand for air travel and the expansion of the global commercial airline industry. Airlines are opting for aircraft leasing as a cost-effective alternative to ownership, driving the market's growth. Additionally, the market is benefiting from the rising number of aircraft deliveries and the increasing focus on air safety standards. Emerging markets are also contributing to the market's expansion, with airlines in these regions opting for leasing to meet their infrastructure needs. The International Civil Aviation Organization (ICAO) and the International Air Transport Association (IATA) are playing crucial roles in shaping commercial aviation regulations and ensuring the feasibility of the leasing. The Future Sky Urban Air Mobility concept is also expected to create investment pockets in the market, further driving its growth.

Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market.  

Key Market Driver

Aircraft leasing as an affordable option as opposed to buying is driving growth in the market. The aviation sector is highly competitive, with many operators striving to meet increased demand. Airlines must position themselves strongly to attract customers, often resorting to discounts that can impact their profits. Consequently, airlines typically operate with low margins. This makes leasing a cost-effective alternative for aircraft operators, particularly in light of commercial aviation regulations and the need for emergency services. Additionally, considerations such as air safety standards, air travel, aircraft & airport infrastructure, aircraft deliveries, aircraft flying hours, and aircraft infrastructure further emphasize the benefits of leasing. Therefore, many airlines opt to lease these from lessors instead of buying them due to financial constraints. Given the high cost of acquisition, nearly all airlines worldwide lease airplanes. The importance of leasing as a cost-effective operating strategy for airlines is expected to drive the market significantly in the forecast period.

Significant Market Trends

The dominance of major aircraft suppliers is a primary trend in the commercial aircraft leasing market. The fact remains that Airbus and Boeing are dominant manufacturers in the market. The leasing companies are extensively dependent on the suppliers for procuring aircraft. As stated by a major lessor, it may be very difficult for lessors to comply with their obligations regarding lessees if deliveries from the supplier end are delayed. This, in turn, will result in many consequences for the lessors.

Moreover, overproduction by suppliers can also have a negative impact on the business.  The demand on the market could, therefore, be substantially outweighed by production. In turn, the aircraft is going to lose its value. Moreover, the lease rates will be reduced owing to the supply-demand mismatch. Thus, the overdependence of lessors on two major suppliers is expected to continue, which will drive the growth of the market in focus during the forecast period.

Major Market Challenge

The asset recovery risks associated with airline bankruptcy are a major challenge in the market. Airlines are considered to be extremely capital-intensive enterprises, and they have very low margins. The ever-dynamic, highly competitive nature of the airline business poses significant challenges to the players in the industry. Airlines are facing difficulties in obtaining optimum financial health if there is a severe internal management crisis or an unforeseen change of externalities. In such a case, the investors that initially backed an airline may choose to withdraw financial support. This will lead to the airline filing for bankruptcy.

Moreover, if an airline goes insolvent, it becomes difficult for the lessor/lessors that supported the airline to retrieve their leased jet in decent operating condition. Filing for bankruptcy by Kingfisher Airlines in India is a big example. There are a few circumstances that could endanger relationships between lessors and lessees, thereby expected to hinder the growth of the market during the forecast period.

Who are the Major Commercial Aircraft Leasing Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

AerCap Holdings N.V. - The company offers commercial aircraft leasing through its subsidiary Milestone Aviation.

Air Lease Corp. - The company offers commercial aircraft leasing, such as Airbus A220.

We also have detailed analyses of the market’s competitive landscape and offer information on 15 market companies, including:

• 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
• Tokyo Century Corp.

Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.  

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Product Outlook 
  • Narrow-body aircrafts
  • Wide-body aircrafts
  • Regional aircrafts

• Type Outlook 
  • Wet lease
  • Dry lease

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

Market Analyst Overview

The market is a crucial component of the aerospace industry, providing aerial solutions and aircraft maintenance services. It plays a significant role in air freight and freight transportation, offering leasing options for both short-term and long-term needs. This market segment helps reduce the financial burden associated with purchasing aircraft outright, especially for low-cost aircraft carriers and operators of small aircraft. With a focus on passenger safety and environmental impact, leasing companies are increasingly adopting technological solutions and adhering to technological and regulatory standards. As urban air mobility (UAM) and unmanned aerial mobility (UAM) solutions evolve, the demand for leased aircraft is expected to rise, further driving the market's growth.

The market is influenced by various factors, such as aircraft maintenance requirements, airplane deliveries, and capacity demands. It involves significant capital outflow for leasing commercial aircrafts and conducting feasibility studies. The market adheres to International Flying Transport Association (IATA) standards and offers both short-term and long-term leasing options. It plays a crucial role in mobility services and urban air mobility (UAM) solutions, providing transportation efficiency for medium and long-distance single-passenger car trips. With a focus on Vehicle integration and raw material supply, the market continues to evolve to meet the growing demands of the aviation industry.

Market Scope
Report Coverage	Details
Page number	163
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 9.48%
Market growth 2023-2027	USD 19.45 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	7.95
Regional analysis	APAC, Europe, North America, South America, and Middle East and Africa
Performing market contribution	APAC at 43%
Key countries	US, China, Japan, Germany, and France
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	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.
Market dynamics	Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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