Speaking at Airline Economics’ Fleet Management, Assets and Parts Trading Day in Dublin, Walter Valarezo, head of America sales, DAE Capital, surmised: “At this point, we’re extending around two third of aircraft that are seeing lease expiries coming up”. With certain spare parts coming under critical supply chain pressures, “there’s no doubt that every single redelivery is late because of that,” he continued, highlighting that pressures could continue into 2026. “We don’t see anything changing in terms of supply chain disruption… and frankly, demand continues to go up,” he noted. “So we just have to be become better at managing and collaborating with spare parts suppliers to be kind of a little more proactive.”
“Inflated lease rates of brand new aircraft are here to stay unless escalation goes away, or unless interest rates go back down to zero,” added Valarezo, with markets for used aircraft assets “beginning to basically recover to what they should have been” (despite some arbitrage caused by ongoing supply and demand complications).
“We’re going to see a lot of aircraft traded this year,” agreed Lourens Geldenhuys, managing director at AFS Aero. “We are really hoping that… investors will be able to leverage their returns more with gearing that’s not really been possible over the last year,” he added, noting that there will hopefully be more opportunities to buy assets this year at more reasonable prices.
Investors are taking comfort that even if they buy aircraft on short leases, there “is more integrity in the residual value projections because the useful life on the aircraft are being extended,” highlighted Geldenhuys. John Fields, CTO & MD Ireland, IAT Leasing, agreed, saying: “I think the opportunity to improve residual values modelling to reflect [the] current market is key, and not just anecdotally.”
Demand for aircraft leasing to remain strong in 2024
