Aircraft Leasing
Description
Companies in this industry rent or lease aircraft and airplane equipment without operators. Major companies include Air Lease Corporation (the US), as well as AerCap and Avolon (both based in Ireland) and Dubai Aerospace Enterprise.
The global aircraft leasing market is forecast to reach about $400 billion by 2032, at a compound annual growth rate (CAGR) of about 11%, according to Fortune Business Insights. The global market growth was driven by the increasing demand for cost-efficient operation of commercial aircraft, technological advancements, rising market demand for fuel-efficient commercial aircraft, and increasing air traffic.
The US construction, transportation, mining, and forestry machinery and equipment leasing industry, which includes the aircraft leasing industry, includes about 5,300 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $38 billion.
COMPETITIVE LANDSCAPE
Demand is driven by activity in the air travel industry. The profitability of individual companies depends on the fleet mix and the cost of financing rental inventory. Large companies have economies of scale in buying aircraft and accessing multiple sources of capital, as well as maintaining a diversified aircraft portfolio. Small companies can compete by providing superior customer service and depth of experience.
PRODUCTS, OPERATIONS & TECHNOLOGY
The majority of revenues come from the construction, transportation, mining, and forestry machinery and equipment rental and leasing market which.accounts for about 55%. The lease and rental of air transportation equipment accounts for about 35%. Some aircraft rental firms also sell planes and aircraft engines and offer fleet management services to generate additional revenue streams. Firms typically offer between 100 and 1,000 aircraft for lease.
Airlines lease or rent rather than buy planes because of the lower capital commitment, to increase fleet flexibility, and reducing aircraft residual value risk. Sometimes airlines enter lease-to-own agreements.
Aircraft leasing companies buy equipment from aircraft manufacturers, investors, and airlines. Because aircraft are expensive, companies typically finance inventory with financial services companies. Rental aircraft are recorded at cost and depreciated over the estimated useful life, generally up to 25 years for a passenger aircraft. Leases generally last one to 15 years.
Some companies have their own used plane or airplane parts business or have relationships with used plane dealers to dispose of depreciated equipment. Companies sell their aircraft from their leased fleet to other leasing companies, financial services companies, and airlines.
Aircraft rental firms occasionally have to repossess aircraft if lessees default or otherwise break lease conditions.
The global aircraft leasing market is forecast to reach about $400 billion by 2032, at a compound annual growth rate (CAGR) of about 11%, according to Fortune Business Insights. The global market growth was driven by the increasing demand for cost-efficient operation of commercial aircraft, technological advancements, rising market demand for fuel-efficient commercial aircraft, and increasing air traffic.
The US construction, transportation, mining, and forestry machinery and equipment leasing industry, which includes the aircraft leasing industry, includes about 5,300 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $38 billion.
COMPETITIVE LANDSCAPE
Demand is driven by activity in the air travel industry. The profitability of individual companies depends on the fleet mix and the cost of financing rental inventory. Large companies have economies of scale in buying aircraft and accessing multiple sources of capital, as well as maintaining a diversified aircraft portfolio. Small companies can compete by providing superior customer service and depth of experience.
PRODUCTS, OPERATIONS & TECHNOLOGY
The majority of revenues come from the construction, transportation, mining, and forestry machinery and equipment rental and leasing market which.accounts for about 55%. The lease and rental of air transportation equipment accounts for about 35%. Some aircraft rental firms also sell planes and aircraft engines and offer fleet management services to generate additional revenue streams. Firms typically offer between 100 and 1,000 aircraft for lease.
Airlines lease or rent rather than buy planes because of the lower capital commitment, to increase fleet flexibility, and reducing aircraft residual value risk. Sometimes airlines enter lease-to-own agreements.
Aircraft leasing companies buy equipment from aircraft manufacturers, investors, and airlines. Because aircraft are expensive, companies typically finance inventory with financial services companies. Rental aircraft are recorded at cost and depreciated over the estimated useful life, generally up to 25 years for a passenger aircraft. Leases generally last one to 15 years.
Some companies have their own used plane or airplane parts business or have relationships with used plane dealers to dispose of depreciated equipment. Companies sell their aircraft from their leased fleet to other leasing companies, financial services companies, and airlines.
Aircraft rental firms occasionally have to repossess aircraft if lessees default or otherwise break lease conditions.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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