According to data from Boeing, improvements in load factor and aircraft utilisation over the past 10 years have saved the world's airlines from having to operate an additional 3,800 aircraft. If they still had the same level of load factor in 2017 as in 2007, today's fleet would need more than 1,000 more aircraft to fly current levels of demand. At 2007 levels of daily utilisation, they would need 2,800 more aircraft today.
This is another illustration of the airline industry's improved capital discipline, also evident in the lower fleet growth rates that CAPA has highlighted in presenting its analysis of the global airline operating margin cycle (most recently updated in Jan-2017). However, there has been a strong increase in global aircraft investment and, therefore, in financing needs since the end of the financial crisis.
There have also been changes to the mix of financing sources and there is now a good balance between cash, bank debt and capital markets, overlaid by leasing. Ultimately, the health of the aircraft financing market will follow the cycle, but currently they are in a healthy state.
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