Lease rates on popular aircraft types expected to rise
The ACMI market grew significantly last year and will see another major jump this year from long-term players and start-ups alike, according to industry experts. They see a strong need for ACMI in the market right now and it’s only expected to grow – the market is predicted to reach US$ 8.9 billion in 2030.
“Those operators almost exclusively operate mid-life, leased fleets, and this demand has helped get a significant number of narrowbody aircraft out of storage and operating again,” Alex Vella, COO of Magnetic Leasing tells AviTrader Weekly.
This trend can be seen with the recent announcement that ACMI, charter and cargo operator SmartLynx Airlines has received Australian Foreign Air Transport Operator Certificate to begin operations to, from, and within Australia.
SmartLynx plans to operate A330 type aircraft from its new Australian base and the ACMI operator also plans to receive certification for other aircraft types like the A320, A321, and B737.
Vella expects lease rates to continue to rise. “In 2022, mid-life aircraft increased a few percentage points on A320 and 737NG fleets. Therefore, 2023 should be similar, if not better. Interest rates will be the overriding factor that drives them up. For the current tech though, fuel prices will play a part in how much the airlines can stomach.”
According to Bloomberg, lease rates for new aircraft would need to increase 20% in order to deliver the 2019 IRR expectations with the current interest rates, and that holds in the mid-life space unless residual values go up significantly with inflation. As for type, Vella reckons the B737-800 should outstrip the A320 due to the supply and demand of the respective fleets. “New deliveries of A320neos are outstripping the MAX, and the end-of-life freighter option sees the Boeing programme at a more mature phase, approaching 200 in service versus one Airbus,” Vella notes.
“OEMs are dealing with backlogs and the situation is made more complicated by a number of overbooked MRO slots.”
Lukas Petrauskas, Deputy CEO, KlasJet
Earlier this month, KlasJet’s Deputy CEO Lukas Petrauskas said the company will start passenger ACMI operations with 8 737-800s before the peak summer season. “OEMs are dealing with backlogs and the situation is made more complicated by a number of overbooked MRO slots. Paired with the first summer largely out of the pandemic, and skyrocketing demand for travel, it’s key for tour operators, brokers, and airlines to take action now and not wait until right before the high summer season.”
