Aviation lease rates have risen by 50pc, pushed up due to the 20pc shortfall in aircraft deliveries last year,, a new report from PVC Ireland has reported.
The report launched for the aviation conference season in Dublin says that supply chain issues will continue affecting aircraft production, with delivery rates below projections and a shortfall of over 4,500 commercial aircraft. Aircraft deliveries were 20pc below expectations last year.
It says that a strong global economy and reduced oil prices are expected to aid the aviation market’s recovery and complete post-Covid traffic recovery in Asia by 2025.
The aviation industry has seen increased passenger and cargo traffic in 2024, with airlines reporting better profitability than anticipated despite ongoing challenges.
The aircraft leasing sector has benefited from capacity issues, although the backlog in aircraft deliveries may limit future growth opportunities.
Dick Forsberg, senior aviation finance consultant with PwC Ireland and former head of strategy at Avolon, shared “A key factor on the journey back to a fully functioning supply chain is rebuilding the depth of experience in the workforce. Despite these challenges, airlines carried more passenger and cargo traffic at higher average load factors in 2024 compared to 2023 and both operating and net profitability were well ahead of predictions. These are good reasons for optimism heading into 2025 and beyond.
Brian Leonard, aviation finance leader at PwC Ireland shared The aircraft leasing sector has been a net beneficiary of the capacity issues and improving underlying demand in aviation. The shortage of aircraft and delivery slots now extending into the 2030s has been a boon for aircraft lessors. Lease rates for new technology aircraft jumped as much as 50pc last year. However, the shortfall and backlog of aircraft deliveries may also limit lessor’s growth strategies over the medium and longer term and other avenues for expansion may need to be considered,”
