Lessors of commercial aircraft are benefitting from strong passenger demand, as are their customers (the airlines). However, the lessors are also benefitting from the positive impact on lease rates and aircraft market values resulting from supply chain constraints.
The global aircraft leasing sector is led by AerCap – by far the biggest player by fleet and revenue – but there is a clear top five of leading lessors (which also includes Air Lease Corporation, Avolon, BOC Aviation and SMBC Aviation Capital).
These five have 31% of lessor aircraft in service, but 48% of lessor orders (source: CAPA - Centre for Aviation Fleet Database) – this points to a further increase in their share of the world’s leased fleet in future.
The leading lessors’ financial results were hit by COVID-19 and the Russian aircraft crisis in 2022, but profits have recovered.
Moreover, the credit ratings of the top five have remained investment grade.