Aircraft Leasing Market Research Report Information - Global Forecast to 2030

Aircraft Leasing Market Research Report Information - Global Forecast to 2030

ID: MRFR/A&D/2894-CR | February 2021 | Region: Global | 140 pages

Impact of Covid-19 Outbreak on Aircraft Leasing Market

Current Impact

The aviation industry has witnessed unprecedented scenarios in the last two months due to the COVID-19 pandemic. The outbreak of the virus has had the most dramatic effect on airline and aircraft leasing companies. It is not wrong to assume that there could be severe casualties in airline companies and lessors. Airlines that have leased a large share of their fleet have been significantly hit due to large capital outflow due to the grounding of these aircraft. 

Pre-COVID-19 Impact on the Aircraft Leasing Industry

According to Market Research Future, the global aircraft leasing market was estimated to reach USD 78,381.5 million by 2026 due to factors such as the need for airlines to increase fleet capacity. Moreover, countries such as India had recorded the highest growth rate in air traffic passengers, and airline companies in the country had procured several aircraft on lease. Similar trends were observed by other airline companies across Asia-Pacific. The increased air passenger traffic and growing per capita disposable income had a positive impact on air travel in Asia-Pacific, which led to airline companies expanding their aircraft fleet through leasing. The aircraft leasing industry was expected to witness a double-digit Compound Annual Growth Rate (CAGR) by 2026. In addition to this, aircraft manufacturing companies designing fuel-efficient aircraft also contributed to market growth.

Annual aircraft financing requirement

Post-COVID-19 Impact on the Aircraft Leasing Market

COVID-19 outbreak has a devastating impact on the aviation industry across the world. Post the impact of the pandemic, very few countries have allowed transportation through air network. A majority of the airline companies have grounded their fleet due to a significant reduction in air travel. Apart from a reduction in air travel, the pandemic has painted a distressing picture for airline companies as they are presently burning significant capital towards maintenance and payments to leasing companies. Global organizations, including the International Air Transport Association (IATA), has estimated a decrease in international air passenger revenues by approximately 50%. Due to a large amount owed to lessors by airline companies, they look towards their respective governments for financial support in terms of loans, financial support, and tax reliefs to survive during the pandemic.

Airline companies also hope lessors defer the payment on a lease of the aircraft fleet by six months minimum. For instance, aircraft leasing company Avolon owned by Orix Corporation and HNA Group, have received requests by customers for relief in payments, which amount to approximately 80% of their owned fleet. Similar leasing companies such as Avolon have supported airline customers though short-term loan deferrals for forthcoming months. However, the loan deferral would negatively impact the balance sheets of leasing companies, which could drive the company towards bankruptcy if the pandemic situation continued for another six months. As airlines struggle to generate cash, the prolonged impact of COVID-19 is expected to have a negative impact on lessors due to a domino effect.

COVID-19 Impact on the Aircraft Leasing Market in Key Regions

  • North America: North America covers the US and Canada. Various airline companies in the US have their airline fleets leased. The grounding of aircraft fleets has led to these companies not being able to make payments for leased aircraft and seek to have their payments deferred till the air travel demand returns to normalcy. Furthermore, orders placed by airline companies for leasing of aircraft have been either canceled or postponed due to the pandemic.

  • Europe: As flight operations are suspended in Europe, governments across various countries in the region are expected to support airline companies in this region through financial aid, which is, in turn, expected to provide aircraft leasing companies with much-needed support. Moreover, budget airlines such as Ryanair are expected to commence flight operations by July, which could enable these companies to make leasing companies their due payments.

  • Asia-Pacific: Asia-Pacific covers China, India, Japan, Australia, Singapore, and Australia, among others. Aviation companies operating in this region are expected to seek lease waivers. For instance, Australian airline company Virgin Australia is seeking lease waivers of approximately USD 4.4 billion for three months. As the pandemic continues, more airlines are expected to follow this trend in Asia-Pacific.

  • Middle East & Africa: Airline companies in the Middle East & Africa are operating with restricted passenger flights. Though the pandemic has reduced the regional air network, airline companies are expected to acquire additional aircraft through leasing. For instance, Qatar signed a leasing agreement with an Irish aircraft leasing firm Standard Charter, valued at approximately USD 850 million, to acquire seven Boeing 787 aircraft.

  •  Latin America: With many of the Latin American airline companies on the brink of bankruptcy, the leasing market is expected to witness a downward trend in this region. Moreover, the widespread pandemic in Latin America does not allow flight operations to resume anytime soon, which is further expected to increase liquidity crisis, thereby negatively impacting aircraft leasing companies.

The Road Ahead

Airline companies that have orders placed with leasing companies have either been postponed or canceled due to the pandemic. The future scenario is expected to witness airline companies struggling to keep up with payments unless they start generating cash with the help of government support. Moreover, as the pandemic continues, the situation is expected to turn grave for airline leasing companies.

Role of Market Research Future

As a market research and consulting company, Market Research Future has been continuously monitoring and tracking the COVID-19 pandemic and its impact on various markets within the aerospace & defense industry. All our research studies have been updated to accommodate the impact of COVID-19 in the respective market to provide our customers with comprehensive market data along with present and future trends with macro and micro-level impact factors.

Table of Content

  • Impact of Covid-19

    • Impact of Covid-19 on Global Economy

    • Impact of Covid-19 on Aerospace & Defense Industry

      • Impact on Aerospace Industry

      • Impact on Defense Industry

    • Supply Chain Impact

      • Impact on Manufacturer/Developer

      • Impact on Component/Services Supplier

      • Impact on Distribution/Logistics

      • Impact on Consumer

    • Aerospace/Defense Component/Service Pricing Analysis

    • Impact on Aerospace/Defense Regulations

    • Market Recovery Analysis

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