The aviation leasing market has been on a rapid escalation over the past few years and in 2015 it was estimated at US$179 billion. It is estimated to grow at a CAGR of 6% and touch US$245 billion by 2021 (Source: Research and Markets: Global Aircraft Leasing Market by Aircraft Types, Lease Types, Airlines, Revenue Sources and Region 2014 – 2021).
Several factors have contributed to its growth, including lower interest & lease rates, growth in emerging economies and demand for novel aircrafts. Moreover, there is an increased awareness among companies, HNWI, aircraft operators and airlines of the advantages such leasing have over owning an aircraft, such as:
• Lease new aircraft types at lower costs.
• Eliminate the risk of owning a superseded asset.
• Maintain cash for other business investments / activities and preserve working capital.
• Tax advantages, such as investment tax credits & depreciation allowances that many countries offer.
• Plummet debt burden.
Types of Aircraft Leasing
Aircraft leasing is of 2 main types:
Dry Lease – This is more common of the two. The aircraft owner / lessor (the aircraft operator or airline) provides only the aircraft. Crew, fuel, insurance, maintenance or supporting equipment is not included in the lease.
Wet Lease – The lessor provides ACMI (Aircraft, Crew, Maintenance and Insurance). The lease period is generally from one month to two years and the lessor maintains the operational control of the aircraft.
Aircraft leasing is a highly specialized field and Delta World Charter can assist in a big way in easing up the process and maximizing the benefits of the deal. For further details, contact us.