TrueNoord’s Post

✈️ Investors Are Flocking to Aviation Leasing – Here’s Why: With air travel demand leveling back out, aviation leasing is seeing unprecedented investor interest. The appeal? Consistent cash flow, long-term asset value, and resilience even in turbulent times. From mid-life regional jets to "Goldilocks stage" business aircraft, investing in leasing may offer predictable returns, making them a prime choice in today’s volatile market. As operators look to optimize fleet flexibility, investors are seizing the chance to partner in business aviation's revival. Aviation leasing isn’t just about aircraft; it’s about opportunity. Ready for takeoff? #AviationLeasing #InvestmentOpportunity #Aviation

The global aircraft leasing market is projected to grow from USD 183.23 billion in 2024 to USD 401.67 billion by 2032, with a CAGR of 11.1%. Growth is driven by the expansion of low-cost carriers, increasing air traffic, and airlines' preference for leasing to reduce costs. Narrow-body aircraft are in high demand, particularly from budget airlines, while dry leases are favored due to lower operational costs. Europe, particularly Ireland, dominates the market due to favorable policies and established lessors.

The global aircraft leasing market is projected to grow from USD 183.23 billion in 2024 to USD 401.67 billion by 2032, with a CAGR of 11.1%. Growth is driven by the expansion of low-cost carriers, increasing air traffic, and airlines' preference for leasing to reduce costs. Narrow-body aircraft are in high demand, particularly from budget airlines, while dry leases are favored due to lower operational costs. Europe, particularly Ireland, dominates the market due to favorable policies and established lessors. https://lnkd.in/gsxskGez

Aircraft Leasing Market Outlook 2032 The global aircraft leasing market size was USD 182.69 Billion in 2023 and is projected to reach USD 399.08 Billion by 2032, expanding at a CAGR of 9.07% during 2024–2032. The market growth is attributed to rapid expansion, maintenance, and resale. Its huge global market in aircraft leasing and finance, looking forward to pie of this market in GIFT CITY #giftcity #IFSCA #investors #aircraftlessors #Funds

Aircraft, Engine and APU Leasing: The Untapped Opportunity We are seeing more and more smart money drawn to the less glamorous, yet highly profitable side of aviation, for example: Aircraft engine and auxiliary power unit (APU) leasing. With high demand for short-term leases to cover maintenance and AOG scenarios, these assets are pivotal to keeping fleets operational. As specialist financing options evolve, opportunities in this niche market are proving lucrative. With innovative structures, investors can secure substantial returns by fueling the backbone of business aviation. #AviationLeasing #InvestmentOpportunities #AviationGrowth #BusinessAviation

The Aircraft Leasing Market: Opportunities for Growth The global aircraft leasing market is on the rise, with projections of significant growth in the coming years. Factors such as the post-pandemic recovery, increased air travel demand, and evolving leasing structures are driving this expansion. For aviation stakeholders, the benefits are clear—leasing offers flexibility, reduced capital outlay, and lower operational risk. At Stratos, we’re excited to be part of this transformative period in aviation finance. How is your company adapting to these shifts? #AircraftLeasing #AviationFinance #GrowthOpportunities #AviationIndustry

There's never been a better moment to be in the market, according to industry leaders in aircraft leasing. The rise in interest rates and the increased demand for airplanes are two of the factors driving the 25–30% increase in lease rates in dollar terms. Leasing aircraft instead of buying them outright from manufacturers is one method that carriers are searching for ways to save expenses. The popularity of leasing aircraft has not only been impacted by the absence of supply from major manufacturers, but by other factors as well. Lease rates are affected by numerous factors beyond just interest rates, such as aircraft demand, supply dynamics, disruptions in the supply chain, environmental efforts, and other variables. These factors can lead to fluctuations in lease rates independently of changes in interest rates. On the flip side, lessors have capitalized on the high interest rate environment, leveraging airlines' hesitance to accumulate more debt. https://lnkd.in/dgS7MKEr

Yes, Split Rock advises airlines and yes, we advise lessors and investors too. We don't make the market though, we offer advice and help deals get done - which gives me the elbow room to talk about aircraft lease rental levels. Ishka: Aviation Finance recently did an interview with Peter Barrett from SMBC Aviation Capital, who thought aircraft lease rentals would increase further. He's right! It is "Back to the Future" everyone. After the Global Financial Recession in 2008/2009, several things happened; year after year after year of historically low interest rates, a flood of money entering the industry and the OEMs providing more supply than demand required (double counting demand that was satisfied by direct airline sales and that occurred again in the lessor speculative order channel). History will tell you that lease rental factors used to be much higher and lease terms used to be shorter on narrow body aircraft. Airlines used to use op' leasing to manage fleet flex. It is now more of a commoditized aircraft financing product on a 12 year term that has squeezed lessor yields over the years. From an investor perspective, a $55m asset should demand more than $350k p.m. in the market. It took OEM and supply chain challenges (including COVID) to really kick start the correction but it is here and here for the medium term. It makes sense that the higher rents flow down the aircraft vintage curve and it is far easier to extend leases than it is to bring other aircraft in (or re-market them if you are a lessor). The issues that got us here may not have historical precedent but where lease rentals are heading does. #lessors Steve Welo John Feren

🛫 The sky is the limit for the aircraft leasing industry according to recent assessments by S&P and Moody’s. At the core of this positivity is the industry’s resilience in the face of unexpected and unprecedented challenges. The article explores the latest trends and the strategic moves that are shaping the future of aircraft leasing.    Read in full here - https://lnkd.in/eV-NNQ26   #MindsMadeForFS #AircraftLeasing #AviationIndustry

Problems with equipment leasing, most likely with operating leases, where upon default by the lessor owner under it’s own financing arrangements, the lenders will seize the aircraft even if that aircraft is subject to a leasing arrangement. The lessee airline loses the use of the aircraft for the rest of the term as well it’s security deposit. Before entering into a leasing arrangement, the lessee should establish some conditions: Funds deposited with the lessor are held in escrow, letter of quiet enjoyment from third parties having an interest in the aircraft, insurance provisions relating to insurance proceeds, availability of maintenance reserves and refund of utilised maintenance reserve on total loss of the equipment, and interest on deposits. Generally there are tax benefits through depreciations. Recent changes to tax systems/foreign investments, high debt to equity ratios, bad lease structuring and reduced income during Covid could result badly for the lessor owner and the airline. When the airline is out of woods and is looking to lease another aircraft, it should listen to the lawyers on terms of its lease, especially if it’s going to be short term wet or dry lease. Vulture wet lessors are waiting for such opportunities to put badly maintained aircraft to business. However where the Lessee is at default in lease payments and the aircraft is seized by the lessor as the investors rely on lease receivables, no matter which investment/financing model it operates on. Lessee will be liable for direct losses to the Lessorunder indemnity clauses. There might be third party guarantee or liquidity facility that can cover the aircraft for 18 months after the lessee default to protect the creditors. It is complicated regime yet profitable for high risk investors.