The aviation industry is finally entering a new cycle, where everything is headed in an upward trajectory. That includes not only demand for air travel but also lease rates and the number of potential bankruptcies. How can airlines navigate this increasingly competitive landscape? Chairman of Avia Solutions Group Gediminas Ziemelis shares his thoughts on the market’s future.
Capacity consolidation in the hands of major lessors
We are living in interesting times. Over the past 18 months lease rentals and market values have seen an unprecedented increase. It is a seller’s market and airlines are ready to pay more and more to secure capacity. Based on appraiser data from ISTAT, narrowbodies are now 25-30% above their pre-COVID level. Rates for older leased aircraft have risen, but even so, airlines are eager to extend leases on these aircraft nonetheless.