Growth of the aviation sector
owing to increasing construction activities of airports and airdromes is
anticipated to propel market growth. Shifting consumer preference for air
travel to reduce their travelling time can augment demand for more commercial
planes among airline companies. Rising demand for more planes is expected to
prompt airline companies to procure commercial planes on lease, which can
support market expansion in the coming years. In addition, constant
developments in aircraft and airport infrastructure in developing countries can
drive the market significantly in the coming years.
Asset recovery risk associated
with bankruptcy of airline companies can hamper market growth. Emergence of
unclear and complicated tax policies and leasing regulations can also restrain
market growth. However, increasing investments by aircraft leasing companies to
expand their business globally and get finically strong can create lucrative
opportunities for the market. Most companies are likely to adopt business
strategies like mergers and acquisitions to gain competitive advantage over
other market players.
The market can be segmented on
the basis of aircraft type and leasing type. Based on aircraft type, the market
can be classified into narrow body and wide body. On the basis of lease type,
the market can be divided into wet leasing and dry leasing. According to the
wet lease model, the leasing company deliver airlines, along with trained crew,
insurance, and maintenance. It can be charged on an hourly basis. The dry lease
model allows the lessor to provide the lessee with the aircraft without any
additional facilities or trained crew.
Asia Pacific is estimated to
hold the largest market share in the coming years owing to advent of various
startup companies in India, China, and Malaysia. China is expected to be a
potential center for commercial planes leasing with focus on local and regional
players. In addition, rising air travel rate in emerging economies owing to
increasing number of airline companies in the region can boost market growth.
Presence of busiest airports in cities, such as Dubai, Beijing, New Delhi, and
Singapore, is likely to gain traction among leasing companies for future
investments. According to International Air Travel Association (IATA), rapidly
increasing air travel rate in developing countries is likely to increase demand
for commercial planes on lease in the coming years. Increasing investments by
lessors to sign new contracts with airline companies and expand their business
can stimulate market growth. For instance, BOC Aviation is likely to purchase
eight new A330neo jets from Airbus SE. The company will lease these airliners
to Lion Air Group. The lessee can purchase four of these planes on delivery.
The company is also expected to purchase three Boeing 787-9 aircraft from The
Boeing Company.
North America is likely to
witness significant market growth owing to growth of the commercial aviation
sector in the United States. Presence of world busiest airports, including
Memphis International Airport and Hartsfield-Jackson Atlanta International
Airport, is likely to increase demand for commercial planes among airline
companies. This, in turn, can contribute significantly to market expansion. For
instance, Air Lease Corporation (ALC) signed an agreement with Samoa Airways to
lease Boeing 737 Max 9. The lessor is expected to deliver the aircraft to
lessee by March 2019. Similarly, the company is also expected to deliver three
Airbus A321LRs to Scandinavian Airlines (SAS). This Airbus can fly to a range
of up to 4000 nm with 206 passengers. SAS is likely to use this aircraft owing
to its low environmental footprint.
Some of the leading companies
operating in the aircraft leasing market are GE Capital Aviation Services, Air
Lease Corporation, BOC Aviation, Aviation Capital Group, and BBAM Aircraft
Leasing & Management.
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