The shortage of aircraft of the Airbus A320neo and Boeing 737 MAX families, competing models in the short- and medium-range single-aisle market, is driving up the lease price of the airplanes. In this context, many operators are opting to extend existing contracts rather than seek new aircraft in the market.
According to aviation intelligence, information and advisory services company IBA, leasing a new Boeing 737 MAX increased by more than 20% between April 2020 and July 2022, to 316.000 dollars per month.
Meanwhile, leasing an Airbus A320neo can currently require a payment of up to 324.000 dollars per month, up 14% from April 2020. The largest model in the family, the A321neo, could be leased for 375.000 dollars per month in July this year.
According to the Cirium platform, more than 51% of the world’s nearly 23.000 operational commercial passenger aircraft are owned or operated by leasing companies. While many airlines own their aircraft, they very often opt for different fleet schemes comprised of both owned and leased equipment.
Since the beginning of the pandemic, the world’s two largest aircraft manufacturers suffered from lack of demand and slowed down their production. In recent months, however, they have begun to receive more firm orders and contracts as a result of the industry’s sustained recovery. Howeverm, supply chain problems and in-house constraints continue to hinder a full recovery in the pace of production.
In addition, sanctions imposed on Russia following its invasion of Ukraine last February led to a shortage in the supply of titanium, a crucial metal for aircraft engine manufacturing. A kind of perfect storm. In between, the beginning of the recovery, not without difficulties.
The rapid acceleration of demand for air travel, encouraged by the general lifting of sanitary restrictions, collided on more than one occasion with the reality of the aviation industry, which was overwhelmed and unable to respond adequately due to a shortage of aircraft, a lack of personnel or a combination of these and other factors.
It is precisely the shortage of available aircraft that has been the main factor behind the recent increase in lease rates. As a result, the major leasing companies, such as Air Lease Corporation, AerCap and Avolon, are making large profits.
This year, airlines are looking for new, more fuel-efficient aircraft in response to the increase in aviation fuel prices. There is a growing demand for newly manufactured aircraft, which are often obtained through leasing companies. On the other hand, rising interest rates are leading to additional increases in rates.
See also: Airbus and Boeing expect supply chain problems to remain through 2023
