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The global aircraft leasing market was valued at USD 172.88 billion in 2023 and is projected to grow from USD 183.23 billion in 2024 to USD 401.67 billion by 2032, exhibiting a CAGR of 11.1% during the forecast period. Europe led the market in 2023 with a 50.32% share, driven by the dominance of leasing companies in Ireland and the rising adoption of leasing models by low-cost carriers (LCCs).
Aircraft leasing offers airlines the flexibility to operate without the financial burden of purchasing aircraft. Lessors purchase aircraft and lease them to operators in return for periodic payments, providing airlines with liquidity, fleet consistency, and capacity flexibility. Leasing is typically short-term (not exceeding 10 years), after which the aircraft is returned to the lessor.
The rapid expansion of low-cost carriers is a key driver. LCCs typically lease most of their fleets to minimize operational costs and increase route coverage. With rising domestic air travel, budget airlines are connecting regional and rural markets, significantly boosting leasing demand.
Global passenger traffic reached 6.8 billion in 2022, with approximately 400 commercial departures per hour worldwide. This surge in air travel has encouraged both new and established airlines to lease aircraft for efficient fleet management and cash flow optimization.
Leasing enables airlines to reduce debt and maintain liquidity. The sale-and-leaseback model, where lessors purchase aircraft ordered by airlines and lease them back, has gained momentum and strengthens airline balance sheets.
https://www.fortunebusinessinsights.com/aircraft-leasing-market-107476
Narrow Body Segment – Market Dominance by Budget Airlines
The narrow body segment is estimated to be the largest in 2023, driven by strong demand from budget airlines and low-cost carriers (LCCs). Full-service airlines are also expanding their narrow-body fleets as next-generation aircraft can now cover longer routes. Despite pandemic impacts, airlines continue to place bulk orders, highlighting resilient demand.
Example: In February 2024, Airbus SE awarded an Indian company a manufacturing contract for its A220 narrow-body aircraft doors under the “Make in India” program, announced by India’s Civil Aviation Minister.
Wide Body Segment – Growth from International Air Traffic
The wide body segment is expected to witness significant growth due to increasing international passenger traffic. Modern wide-body aircraft can now fly over 15 hours continuously with improved fuel efficiency. Given the high cost of purchasing such aircraft, airlines prefer leasing to maintain cash flow and reduce operating costs.
Example: Lease rentals for a Boeing 777-300 ER or Boeing 777-200 LR stand at about USD 1.2 million per month, compared to a purchase price of USD 279 million. Over a 10-year lease, airlines pay nearly half the purchase cost, making leasing highly economical. The segment is expected to account for 27.59% market share in 2023.
Dry Lease Segment – Substantial Growth from Cost Advantages
The dry lease segment is projected to witness substantial growth as it offers low maintenance and operational costs. In this model, the lessor provides only the aircraft, while the lessee handles crew, insurance, and maintenance, giving airlines complete cost control. Widely adopted by LCCs, dry leasing is increasingly being embraced by larger airlines as well. This growing trend has also created new job opportunities in the aviation sector.
Wet Lease Segment – Moderate Growth from Seasonal Demand
The wet lease segment is anticipated to grow moderately due to limited adoption. Here, the leasing company provides not only the aircraft but also the crew, insurance, and maintenance. Airlines opt for wet leasing during peak passenger traffic seasons when they lack resources to rapidly expand operations. Although it offers quick scalability, the lack of full operational control makes it less preferred than dry leasing.
The market is moderately consolidated, with Ireland dominating global leasing activity. Key players focus on fleet expansion, strategic acquisitions, and next-gen aircraft procurement.