Parts of this article (those related to All but esp the table of lessors) need to be updated. The reason given is: Out of date, due to mergers, etc. In particular, #1 and #2 merged..(September 2023) |
Aircraft leases are leases used by airlines and other aircraft operators. Airlines lease aircraft from other airlines or leasing companies for two main reasons: to operate aircraft without the financial burden of buying them, as well as to provide temporary increase in capacity. The industry has two main leasing types: wet-leasing, which is normally used for short-term leasing, and dry-leasing which is more normal for longer-term leases. The industry also uses combinations of wet and dry. For example, when the aircraft is wet-leased to establish new services, then as the airline's flight or cabin crews become trained, they can be switched to a dry lease. In some markets, there may also be hybrid models, such as with crew provided by lessees.
Operating leases of jet airliner accounted for less than 2% of the fleet in 1976, then 15% in the early 1990s, 25% in 2000 and 40% in 2017, with lessors involved in 62% of second hand mid-life aircraft transactions since 2000: 42% in Europe and 29% in North America. [1] In 2015, over $120 billion worth of commercial aircraft were delivered worldwide and half of the global lessors were based in Ireland. [2]
Having an aggressive growth mandate, more aggressive, smaller entrants have overpaid for many of their assets in the sale and leaseback market and are then undercharged on lease rates in order to win the business, with lower maintenance reserves and return conditions: lease-rate factors have fallen to 0.6% per month (7.2% per year), even reaching 0.55% (6.6% per year). [3]
Despite Air Berlin and Monarch Airlines bankruptcies, their leased aircraft have been rapidly placed at "normal market rates" due to traffic growth as global revenue passenger kilometers are up by 7.7% over one year through September 2017, and Airbus struggles to deliver A320neos due to engine supply delays. [4]
In 2007, Beijing allowed Chinese banks to start leasing units, and nine Chinese lessors were part of the 50 largest in 2017, led by ICBC leasing in the top ten, having the value of their managed fleet grew by 15% since 2016. [5] In a few cases, Chinese lessors forgot they had to get secondary leases and missed the redelivery timing, stranding aircraft for a few months. [6]
Rentals are often anchored to LIBOR rates. A320neo and B737 MAX 8 lease rates are $20-30,000 higher than their predecessors: by 2018, a B737-8 can be leased for slightly more than $385,000 per month and a 12 year term with a good credit can be lower than $370,000 per month for an A320neo (0.74% of its around $49 million capital cost), generating $53 million of revenue and over $8.5 million in an end of lease compensation for maintenance, while still being worth $20 million. [7]
Airlines which cannot afford a good deal on factory direct aircraft or carriers who prefer to maintain flexibility can lease their aircraft with an operating lease or a finance lease.
A wet lease is a leasing arrangement whereby one airline (the lessor) provides an aircraft, complete crew, maintenance, and insurance (ACMI) to another airline or other type of business acting as a broker of air travel (the lessee), which pays by hours operated. The lessee provides fuel and covers airport fees, and any other duties, taxes, etc. The flight uses the flight number of the lessee. A wet lease generally lasts 1–24 months. A wet lease is typically utilized during peak traffic seasons or annual heavy maintenance checks, or to initiate new routes. [8] A wet-leased aircraft may be used to fly services into countries where the lessee is banned from operating. [9] It can also be used to replace unavailable capacity or to circumvent regulatory or political restrictions.
They can also be considered a form of charter whereby the lessor provides minimum operating services, including ACMI, and the lessee provides the balance of services along with flight numbers. In all other forms of charter, the lessor provides the flight numbers. Variations of a wet lease include a code share arrangement, a block seat agreement, and a capacity purchase agreement.
Wet leases are occasionally used for political reasons. For instance, EgyptAir, an Egyptian government enterprise, for many years was not allowed to fly to Israel under its own name, as a matter of Egyptian government policy. Hence Egyptian flights from Cairo to Tel Aviv were operated by Air Sinai, which wet-leased from EgyptAir to circumvent the political issue. [10] In 2021, Egypt changed its policy and EgyptAir started operating flights to Israel under its own banner. [11] [12] [13]
The global wet lease market is projected to grow from US$7.35 billion in 2019 to US$10.9 billion in 2029, a compound annual growth rate (CAGR) of 4.1%.
A dry lease is a leasing arrangement whereby an aircraft financing entity (lessor), such as AerCap or Air Lease Corporation, provides an aircraft without crew, ground staff, etc. Dry lease is typically used by leasing companies and banks, requiring the lessee to put the aircraft on its own air operator's certificate (AOC) and provide aircraft registration. A typical dry lease lasts upwards of two years and bears certain conditions with respect to depreciation, maintenance, insurances, etc., depending also on the geographical location, political circumstances, etc.
A dry-lease arrangement can also be made between a major airline and a regional airline, in which the major airline provides the aircraft and the regional operator provides flight crews, maintenance and other operational aspects of the aircraft, which then may be operated under the major airline's name or some similar name. A dry lease saves the major airline the expense of training personnel to fly and maintain the aircraft, along with other considerations (such as staggered union contracts, regional airport staffing, etc.). FedEx Express uses an arrangement of this type for its feeder operations, contracting to companies such as Empire Airlines, Mountain Air Cargo, Swiftair, and others to operate its single and twin-engined turbo-prop "feeder" aircraft in the US. DHL has a joint venture in the United States with Polar Air Cargo, a subsidiary of Atlas Air, to operate their domestic deliveries.
In the United Kingdom, a wet lease refers to an aircraft lease in which the aircraft is operated under the air operator's certificate (AOC) of the lessor. [14] An arrangement where the lessor provides the aircraft, flight crew and maintenance but the lessee provides the cabin crew is sometimes referred to as a "damp lease", a term especially used in the UK; it is also occasionally referred to as a "moist lease". [8] In the UK, a dry lease is when an aircraft is operated under the AOC of the lessee. [14]
At the end of July 2015, the top 50 aircraft lessors managed 8,184 aircraft: 511 turboprop regional airliners, 792 regional jets, 5,612 narrowbody and 1,253 widebody airliners. [15] In 2017, the 150 lessors are managing 8,400 aircraft worth $256 billion with 2,321 aircraft on backlog from 28 of them, their penetration having stabilised at 42.6%. [16] Aircraft lessors are often banks, hedge funds or financial institutions.
Aircraft financing is a $140 billion industry, dominated by Ireland due to the rise and collapse in 1992 of pioneer Guinness Peat Aviation (GPA), of which the former executives manage the largest lessors: Aengus Kelly is the CEO of AerCap, the world's largest, Domhnal Slattery heads the third largest, Avolon, and Peter Barrett runs the fourth, SMBC Aviation Capital while the second largest, GECAS, formed from the hulk of GPA. [17]
Rank | Operating Lessor | Fleet | Backlog | Value ($mn) | 2012 Rank | 2015 fleet | Turbo prop | Regional Jet | Narrow body | Wide body |
---|---|---|---|---|---|---|---|---|---|---|
1 | AerCap | 1,153 | 339 | 33,994 | 9 | 1,279 | - | 4 | 970 | 305 |
2 | GECAS | 931 | 304 | 22,358 | 1 | 1,608 | 31 | 374 | 1,035 | 168 |
3 | Air Lease Corporation | 271 | 357 | 13,120 | 9 | 251 | 18 | 27 | 162 | 44 |
4 | SMBC Aviation Capital (ex RBS) | 445 | 200 | 13,796 | 6 | 393 | - | 7 | 378 | 8 |
5 | BOC Aviation | 285 | 176 | 12,653 | 10 | 256 | - | 16 | 204 | 36 |
6 | Avolon | 546 | 257 | 19,167 | 17 | 166 | - | 6 | 140 | 20 |
7 | BBAM (incl NBB & FLY Leasing) | 390 | 15,284 | 3 | 413 | - | 2 | 357 | 54 | |
8 | Aviation Capital Group | 250 | 132 | 5,397 | 4 | 273 | - | - | 264 | 9 |
9 | ICBC Leasing Co | 277 | 45 | 12,488 | 16 | 173 | - | 13 | 131 | 29 |
10 | AWAS | 231 | 15 | 5,844 | 7 | 295 | - | - | 242 | 53 |
11 | Macquarie AirFinance | 202 | 40 | 4,726 | 13 | 176 | - | 4 | 160 | 12 |
12 | CDB Aviation Lease Finance | 151 | 49 | 5,569 | 26 | 120 | - | 20 | 68 | 32 |
13 | Aircastle | 192 | 4,938 | 14 | 141 | - | 5 | 77 | 59 | |
14 | ALAFCO | 60 | 124 | 2,750 | 12 | 49 | - | - | 46 | 3 |
15 | Boeing Capital | 174 | 1,369 | 11 | ||||||
16 | China Aircraft Leasing | 90 | 138 | 4,278 | 63 | 47 | - | - | 43 | 4 |
17 | Orix Aviation | 167 | 3,991 | 15 | 148 | - | 2 | 132 | 14 | |
18 | Standard Chartered Aviation | 120 | 10 | 4,077 | 18 | |||||
19 | Jackson Square Aviation | 117 | 4,681 | 25 | 110 | - | - | 97 | 13 | |
20 | BoCom Leasing | 114 | 4,328 | 81 | 49 | - | - | 38 | 11 |
Lessors have a preference for narrowbodies over widebodies due to more remarketing opportunities and the substantial reconfiguration time and cost a larger aircraft requires. Reconfiguring an Airbus A330-300 can cost $7 million and even more for a Boeing 777-300ER or an Airbus A380: introducing IFE - $1.5 million ($5,000 per seat), replacing business seats - $1.5 million ($30,000 each), replacing economy seats - $1 million ($5,000 each), a new lavatory or galley - $100,000, moving a monument - $35,000, class dividers - $50,000, passenger service units - $9,000 per passenger, sidewall panels - $6,000 each, updating the IFE database - $125,000, repainting the aircraft - $100,000, engineering costs - $100,000. [18]
Adria Airways d.o.o. was the flag carrier of Slovenia, operating scheduled and charter services to European destinations. The company's head office was at Ljubljana Jože Pučnik Airport in Zgornji Brnik, Cerklje na Gorenjskem, near Ljubljana. On 30 September 2019, the airline declared bankruptcy and ceased all operations.
Egyptair is the state-owned flag carrier of Egypt. The airline is headquartered at Cairo International Airport, its main hub, operating scheduled passenger and freight services to 81 destinations in Africa, Europe, Asia, and The Americas. Egyptair is a member of Star Alliance.
Vietnam Airlines is the flag carrier of Vietnam. The airline was founded in 1956 and later established as a state-owned enterprise in April 1989. Vietnam Airlines is headquartered in Long Biên district, Hanoi, with hubs at Noi Bai International Airport in Hanoi and Tan Son Nhat International Airport in Ho Chi Minh City. The airline flies 117 routes across 19 countries, excluding codeshared services.
Arkia, legally incorporated as Arkia Israeli Airlines Ltd, is an Israeli airline. Its head office is on the grounds of Sde Dov Airport in Tel Aviv, Israel. It is Israel's second-largest airline, operating scheduled domestic and international services, as well as charter flights to destinations in Western Europe and across the Mediterranean. Its main base is Ben Gurion Airport, with a hub at the Ramon Airport.
GECAS was an Irish–American commercial aviation financing and leasing company. AerCap acquired the company from GE Capital on November 1, 2021.
Pegasus Airlines, sometimes stylized as Flypgs, is a Turkish low-cost carrier headquartered in the Kurtköy area of Pendik, Turkey with bases at several Turkish airports.
Jazeera Airways K.S.C is a Kuwaiti low-cost airline with its head office on the grounds of Kuwait International Airport in Al Farwaniyah Governorate, Kuwait. It operates scheduled services in the Middle East, Nepal, Pakistan, Bangladesh, India, Sri Lanka and Europe. Its main base is Kuwait International Airport. The airline has grown since its launch to become Kuwait's second national airline. Jazeera Airways is one of the largest operators at Kuwait airport, having handled a quarter of all aircraft movements and passengers at the airport during July 2009. According to the July 2009 report issued by Kuwait Directorate General for Civil Aviation's, Jazeera Airways had the largest number of aircraft movement in the month with 1834 take-offs and landings, overpassing the second-largest carrier in aircraft movement by 4%.
BH Air Ltd. is a Bulgarian charter and ACMI airline based in Sofia, Bulgaria. BH Air provides charter flights to various tour operators and airlines in Europe, Middle East, Asia and CIS. The airline's headquarter and main base is Sofia, BH Air also have base and line maintenance facility at the airport.
Hi Fly is a Portuguese charter airline headquartered in Lisbon.
Malaysia Airlines operates a fleet of Airbus A330 and A350 as well as Boeing 737NG and Boeing 737 MAX aircraft.
Aircraft finance refers to financing for the purchase and operation of aircraft. Complex aircraft finance shares many characteristics with maritime finance, and to a lesser extent with project finance.
Global AviationOperations (Pty) Ltd, trading as UAB Global Airways and LIFT, is a South African airline headquartered in Johannesburg and based at OR Tambo International Airport.
Kuwait Wataniya Airways (K.S.C.) (Arabic: (شركة الخطوط الوطنية الكويتية, doing business as Wataniya Airways, was a publicly-traded company on the Kuwait Stock Exchange. Wataniya Airways' hub was the Sheikh Saad Terminal in Kuwait while its corporate headquarters were on the property of Kuwait International Airport, Al Farwaniyah Governorate, Kuwait.
Star Air Cargo Pty Ltd, usually known simply as Star Air, is a South African airline that leases out passenger and cargo aircraft.
The Airbus A321neo is a single-aisle airliner created by Airbus. The A321neo is developed from the Airbus A321 and Airbus A320neo family. It is the longest stretched fuselage of Airbus's A320 series, and the newest version of the A321, with the original A321ceo entering service in 1994 with Lufthansa. It typically seats 180 to 220 passengers in a two-class configuration, with up to 244 passengers in a high-density arrangement.
The Airbus A320neo family is an incremental development of the A320 family of narrow-body airliners produced by Airbus. The A320neo family is based on the enhanced variant of the previous generation A319, A320, and A321, which was then retrospectively renamed the A320ceo family.
Syphax Airlines is a charter airline with its head office and main base at Sfax–Thyna International Airport in Sfax, Tunisia. Between 2011 and 2015 the airline operated as a scheduled carrier and served destinations in the Mediterranean.
GetJet Airlines is a Lithuanian charter airline company founded in 2016.
This is a list of aviation-related events in 2019.