How can you forecast demand for leased aircraft?

Aircraft leasing demand driven by a number of factors, including: ? The increasing demand for air travel: The global air travel industry is expected to grow. This will lead to increased demand for aircraft. ? The need for airlines to renew their fleets: Many airlines have aging fleets that need to be replaced. Aircraft leasing can be a cost-effective way for airlines to renew their fleets. ? The rise of low-cost carriers: Low-cost carriers are becoming increasingly popular, and they are often the first to adopt new aircraft types. This is creating new demand for leased aircraft. ? The availability of financing: There is a growing availability of financing options for aircraft leasing. This is making it easier for airlines to lease aircraft.

The aircraft leasing market is extremely competitive and mainly dominated by big ones with unlimited resources is due to the fact on how volatile and fragile the market is. Only the big ones make it pass this storms.

Market availability begins at the OEM. Close focus beginning at this stage of the aircraft’s lifecycle helps to predict and forecast market trends.

An analysis and a forecast of the global economy and its trend, should be added. Also, consideration should be given to a continental level.

I don't see how the aviation market will stop growing in the coming years. Even with the habits changed with of virtual meetings, the interaction between people in business meetings, fairs, events, holidays and the increase in trade between countries (new markets) are clear factors for the growth in traffic passengers and cargo. Consequently, there is an increasing need into aircraft fleet. Other needs are the constant updating/replacement of the current fleet with more efficient aircraft in all aspects of ESG. For the next few years, in regional aviation, the market will be a need for new small aircraft/eVTOL for distances of up to 3/4 hours, which are beginning to be increasingly demanded in countries to replace bus travel.

Fleet planning is a complex process with various challenges. One of the main challenges is accurately anticipating the demand for leased aircraft. Airlines need to analyse market trends, passenger demand, and route profitability, but predicting future demand is challenging. Another challenge is “operational flexibility. Airlines must adjust fleet composition based on seasonal variations and market fluctuations. Airlines must evaluate the financial implications. Leasing allows airlines to conserve capital, but lease rates, maintenance costs, and potential lease extensions need to be managed carefully. Leasing agreements & establishing long-term partnerships with lessors is important. Airlines must always remain updated on market dynamics.

Fleet planning is a critical element that shapes the demand for leased aircraft. Airlines meticulously strategize on the composition, size, and operation of their fleets. This encompasses decisions regarding ownership versus leasing, the specific aircraft types and models to deploy, how to optimize configurations and maintenance, and the crucial timing of retirements and replacements. Each airline's fleet planning approach is tailored to its unique objectives, financial conditions, competitive standings, and operational demands. Recognizing these diverse needs and challenges across the industry allows for a more precise anticipation of the demand for leased aircraft that aligns with each airline's distinct profiles and aspirations.

An important factor to add to this would be historical data of the operator like what type of aircraft have they been using and are they using multi rated pilots and technicians, this is where some airlines have oppertunities to improve financially. Another factor is the expected availablity of the fleet compared to actual data from the past and ecpected growth in the future.

Lease terms and conditions are a crucial determinant of the demand for leased aircraft, as they encompass critical aspects like lease duration, rates, payment structures, maintenance provisions, return conditions, and renewal options within lease contracts. These terms are emblematic of the supply and demand equilibrium within the market and encapsulate the risk and reward expectations of lessors and lessees. Effective monitoring and comparative analysis of lease terms and rates across various aircraft types and regions provide valuable insights for assessing the demand for leased aircraft that not only meet but excel in delivering value and flexibility, ultimately driving informed decision-making within the aviation industry.

As aircraft characteristics, including age, condition, efficiency, and reliability, significantly impact demand for leased aircraft, these attributes shape market preferences and residual values. Evaluating and benchmarking these factors across various aircraft types and models helps estimate the demand for leased aircraft that meet market standards and expectations.

Aircraft characteristics make sense if they are combined with the market trend to long or short haul aircrafts. Generally, the airlines will not deviate from their existing fleet.

We need to take into account the complexity of determining a demand 5/10 years before it exists. Research continues to systematically adjust the route. only a very attentive team is the one who will determine the success in defining new aircraft

The demand model on its own is just a software. A company needs properly qualified personel to select the proper model, instert accurate data and provide correct analysis of the results.

The utilization of demand models and analytical tools constitutes a fifth crucial factor in molding the demand for leased aircraft. These models encompass mathematical and statistical methodologies that leverage data and assumptions to forecast and project future demand for leased aircraft. The complexity, accuracy, and applicability of these demand models can vary significantly based on factors such as data sources, variables, parameters, and scenarios employed. The judicious selection and application of suitable demand models and tools serve to enhance the precision and dependability of forecasts and analyses, providing valuable insights in the aviation industry.

The sixth factor of significance in the dynamics of the demand for leased aircraft is the market's exhibited demand sensitivity and elasticity. These metrics gauge the market's responsiveness and adaptability to alterations in variables such as price, income, cost, quality, and other factors that influence the demand for leased aircraft. Notably, demand sensitivity and elasticity can diverge considerably among various aircraft types, sizes, markets, and regions. Rigorous measurement and testing of these aspects provide essential insights into the potential and vulnerability of demand forecasts and analyses, ultimately guiding strategic decisions in the aviation sector.

Macroecomic indicators are having a large impact on the medium and long term: purchasing power, gdp per capita, % of urban population, etc. These indicators, benchmarked at the country level can help understand the future growth of under developed markets

I see as relevant forecasting leased aircraft demand including climate change factors considering the five (not limited) items: 1) Collect data: Gather historical aircraft leasing data, climate data, and regulatory changes. 2) Analyze climate impact: Assess how climate change may affect demand, considering extreme weather events, consumer preferences, and emissions regulations. 3) Model scenarios: Develop predictive models incorporating climate variables, using machine learning techniques. 4) Stakeholder insights: Engage with key stakeholders for diverse perspectives in order to identify and mitigate risks. 5) Monitor and adapt: Continuously update forecasts as climate and market conditions evolve and implement risk mitigation strategies.

Forecasting is always a hard task, regardeless of the amount of data one has in hands. In a market affected by an uncontable quantity of variables (climate change, politics, publicity about air crashes and so on) you are constantly on the verge of a turmoil. That said, I think there's still room for growth in this market.

I cannot help feeling that this is attempting to predict the unpredictable. There are very few factors in commercial aviation over which the Industry has any control. If airlines confined themselves to acquiring the aircraft that they both needed to satisfy current demand AND could afford, there would be much less growth. An entire Industry has built up around aircraft finance with banks and institutions exploiting capital allowances that were never intended for that purpose. Like so much in modern life, we have built on a foundation of sand. Discuss.