By Conor Humphries
LONDON (Reuters) – Aircraft leasing companies now buy more of the world’s planes than airlines after their share hit record levels during a pandemic that clobbered carriers, according to industry pioneer Steven Udvar-Hazy.
The shift is down to leasing giants being able to access cheaper financing than carriers, he said, in another sign of the financial woes facing much of the airline industry.
Aircraft lessors, who buy planes from manufacturers like Airbus and Boeing and lease them on to airlines, had accounted for around 40-45% of aircraft deliveries before the pandemic, Udvar-Hazy, executive chairman of lessor Air Lease Corp, told the Airline Economics conference in London on Monday.
“Leased content has grown to around 60% of deliveries.. including sale-and-leasebacks, finance leases and operating leases,” said Udvar-Hazy, who helped found the aircraft leasing industry with International Lease Finance Corporation in the 1970s.
Some lessors are paying under 2% for finance compared to over 4% for some of the largest airlines in the United States and Europe, he told the first major leasing sector conference since the crisis.
Udvar-Hazy warned there was a danger that overproduction by Boeing and Airbus could put further pressure on the airline industry by pushing down prices.
Airlines are likely to continue to struggle, with at best 80% of 2019 passenger numbers next year with downward pressure on fares due to tough competition, he said.
(Reporting by Conor Humphries; editing by Jason Neely and Pravin Char)
