International leasing companies are playing an increasingly important role in aircraft acquisitions, accounting for one-third of all jetliners that leave Airbus final assembly lines today.
The important role of international leasing companies in air transport has grown considerably over the past four decades, with the global fleet of leased aircraft expanding 25-fold during this period.
Airbus has been a key supporter and contributor to this trend, becoming the first aircraft manufacturer to create an operation dedicated to working with lessors in 1995. At the time, roughly 2,800 airliners were on lease around the world – a figure that has swelled to more than 6,600 today. Currently, a third of all jetliners leaving Airbus final assembly lines are built for lessors.
Major leasing companies – including Airbus' two largest customers, GE Capital Aviation Services (GECAS) and International Lease Finance Corporation (ILFC) – offer a low-risk option for airlines, allowing them to operate without the need for financing a fleet and providing flexibility to add or remove capacity as needed.
Lessors also represent low-risk customers for Airbus, explained the company’s head of leasing markets, Paul Kiteley. “They can be relied on to take delivery of an aircraft,” he said. “Even better, during a downturn, leasing companies often will step in to purchase aircraft whose delivery has been deferred.”
As active participants in all of the world’s markets, leasing companies are less susceptible to the cyclical nature of air travel. When passenger traffic decreases in one region, it often will grow in others.
According to Frank Vermeire, Airbus’ marketing director for leasing markets, the company takes a different approach in working with its leasing company customers. “We focus on marketing the long-term investment potential of our aircraft,” he said. “Airbus helps the lessor understand the market, giving it the confidence to order on a speculative basis, and then help place the aircraft. We work in partnership.”
These partnerships have proved beneficial for Airbus, as 36 new single-aisle and six long-range operators have come to the company as direct customers via lessors since 2005. “Some may be sold as purchase and lease-back, but many will actually be owned by the airline,” added Kiteley.