Commercial Aircraft Leasing market is USD 169452.5 million in 2023 and will grow at a CAGR of 8.00% from 2023-2030:Cognitive Market Research
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Introduction of the?Commercial Aircraft Leasing Market
Commercial aircraft leasing involves renting aircraft to airlines for a predetermined period, providing flexibility without the financial commitment of ownership, and encompassing various leasing structures and terms. The commercial aircraft leasing market involves leasing aircraft to airlines, offering flexibility without the financial burden of ownership. Key players employ various strategies, including fleet expansion, mergers and acquisitions, and long-term partnerships. Some focus on specific aircraft types or emerging markets. Enhanced customer support, innovative lease structures, and sustainable aviation practices also feature in strategies. These dynamic approaches allow key players to adapt to market demands, capitalize on opportunities, and ensure sustainable growth in the competitive aircraft leasing industry.
For instance, in April 2022, Air Lease Corp. (ALC) announced that it was extending its airplane portfolio with a secured order for 32 additional 737-8 and 737-9 jets. As the travel market rebounds after the epidemic, ALC is expanding its 737 MAX family to meet airline needs for modern, fuel-efficient, and tolerable operations.
Key Insights from Commercial Aircraft Leasing Market Report
The Global Commercial Aircraft Leasing market is USD 169452.5 million in 2023 and will grow at a CAGR of 8.00% from 2023 to 2030.
Fleet Modernization with NextGen Aircraft to Provide Viable Market Output
The commercial aircraft leasing market is experiencing growth driven by fleet modernization with NextGen aircraft. Airlines increasingly prefer leasing to swiftly adopt technologically advanced and fuel-efficient aircraft, reducing ownership risks. NextGen aircraft, equipped with advanced avionics and fuel-efficient engines, offer improved operational efficiency and environmental sustainability. Leasing enables airlines to maintain a modern and competitive fleet, adapt to evolving market demands, and manage capital expenditure effectively in the dynamic aviation industry.
For instance, the International Air Transport Association has declared that the production of sustainable aviation fuel will reach approximately 300 million liters in 2022, compared to 100 million liters in 2021.
The commercial aircraft leasing market experiences growth fueled by technological advancements and product innovation. Continuous aircraft design, fuel efficiency, and avionics improvements contribute to a modern and competitive leasing fleet. Innovations in leasing models, such as power-by-the-hour arrangements, enhance flexibility for operators. Additionally, advancements in data analytics and maintenance technologies improve the efficiency and reliability of leased aircraft. Overall, technological progress and innovation play a major part in shaping the vibrant landscape of the commercial aircraft leasing market.
For instance, in April 2022, BOC Aviation Limited declared that it coordinated with Airbus SAS to purchase 80 latest Airbus A320NEO family aircraft. All aircraft are planned for delivery between 2027 and 2029.
Market Dynamics Of the?Commercial Aircraft Leasing
The absence of modern airport infrastructure is a significant problem for aircraft lessors, as recently leased aircraft must be found and stored in the right place. The availability of efficient airports is one primary need for the investor or lesser glancing forward to supporting the aircraft leasing industry. Airport infrastructure and new aircraft requirements call for airfield improvements and expansion. Moreover, with a growing leased aircraft fleet, these aircraft require proper parking and storage space, which can only be provided by the airport authorities and respective airport operators, but due to a lack of appropriate infrastructures in growing economies, aircraft leasing cannot be developed in various regions of the globe.
Impact of COVID-19 on?the?Commercial Aircraft Leasing Market
The commercial aircraft leasing market has faced challenges due to the COVID-19 pandemic. Travel restrictions, decreased demand for air travel, and financial uncertainties led to reduced aircraft leasing activity. Airlines struggled with liquidity issues, impacting their ability to enter new leasing agreements. Additionally, leasing companies faced challenges in remarketing and repossessing aircraft. Despite these setbacks, the market is expected to recover gradually as the aviation industry rebounds and demand for leased aircraft resumes with the global economic recovery.
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Competitive Landscape of the?Commercial Aircraft Leasing Market
The major players rapidly evolve with new strategies to attain a competitive edge and capture significant market share. The major commercial aircraft leasing market participants emphasize expanding creative offerings to serve a large consumer base and gain a competitive benefit.
Commercial Aircraft Leasing?Industry News
Top Companies Market Share in Commercial Aircraft Leasing Industry:
Commercial Aircraft Leasing Market Analysis
Type Segment Analysis
According to Cognitive Market Research, dry leasing held a significant market stake over the projected period due to airlines' preference for flexibility and capital efficiency. Dry leasing allows airlines to access aircraft without the financial burden of ownership, facilitating route expansion, fleet optimization, and cost-effective operations. It offers operational flexibility, aligning with airlines' dynamic needs while avoiding the financial commitment and risks of owning aircraft.
Wet leasing is the fastest-growing category over the forecast period due to its flexibility and cost efficiency. Airlines opt for wet leasing arrangements, obtaining fully crewed and maintained aircraft for short-term needs, reducing operational complexities and capital expenditure. This enables them to meet fluctuating demand, expand fleets, and ensure efficient operations without the long-term commitments of purchasing aircraft outright.
Application Segment Analysis
According to Cognitive Market Research, asset-backed security (ABS) holds a prominent market stake as it allows lessors to raise capital by securitizing lease payments. ABS enhances liquidity, reduces financial risks, and attracts investors. The ability to leverage aircraft assets through ABS structures drives the expansion of the commercial aircraft leasing market globally, fostering industry growth and financial flexibility.
Non-asset-backed security (Non-ABS) is the fastest-growing category over the forecast period due to a rising preference for leasing over ownership, enabling airlines to manage fleet flexibility, reduce capital expenditures, and optimize operational costs. Non-ABS structures provide innovative financing solutions, enhancing accessibility for airlines and fostering growth in the commercial aircraft leasing sector.
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Security Type Segment Analysis
In terms of revenue, the North American Commercial Aircraft Leasing Market share was 40% of the total market
According to Cognitive Market Research, North America dominated the market in 2023 and accounted for around 40% of the global revenue, owing to the region's robust aviation industry, economic growth, and cost-effective fleet management. Airlines prefer leasing to mitigate upfront acquisition costs, access the latest aircraft models, and respond flexibly to market dynamics. The competitive landscape, with major leasing companies headquartered in North America, further propels market growth. Additionally, leasing provides financial advantages, allowing airlines to allocate capital strategically and fostering continued expansion and efficiency in North America's dynamic aviation market.
Europe is the fastest-growing region due to the continent's dynamic aviation industry, cost-conscious airlines, and the desire to modernize fleets. Leasing offers flexibility, enabling airlines to manage capacity efficiently without large upfront investments. Stringent environmental regulations also drive demand for newer, fuel-efficient aircraft. Additionally, the leasing model supports airlines facing financial constraints, contributing to the growth of the commercial aircraft leasing market in Europe.
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