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Leasing firms now buy more planes than ailing airlines


© Reuters. FILEPHOTO: Ray Conner is the CEO of Boeing Commercial Airplanes and Steven Udvar Hazy the CEO of Air Lease Corp., as they ring the New York Stock Exchange’s bell during the Farnborough Airshow 2012 held in south England on July 9, 2012. REUTERS/Luke MacGregor/File Phot

By Conor Humphries

LONDON (Reuters) – Aircraft leasing companies now buy more of the world’s planes than airlines after their share hit record levels during a pandemic that clobbered carriers, according to industry pioneer Steven Udvar-Hazy.

He said that the shift was due to the fact that leasing companies are able to obtain cheaper financing than airlines, which is another indication of financial difficulties facing many in the airline industry.

Aircraft lenders, which buy aircraft from Boeing (NYSE 🙂 manufacturers and lease them out to airlines, accounted for 40-45% of plane deliveries in the period before the pandemic. Udvar Hazy (executive chairman of Air Lease Corp NYSE 🙂 Corp spoke Monday at the Airline Economics conference.

Udvar-Hazy who founded the aviation leasing market with International Lease Finance Corporation back in 1970s said that 60% of all deliveries now have leased content. This includes sale-and leasebacks, finance and operating leases.

The first major sector leasing conference was held since the crisis. He stated that some lessors now pay less than 2% for financing, as opposed to the over 4% charged by the biggest airlines in America and Europe.

Udvar Hazy said there were risks that the industry could be further impacted by Airbus and Boeing overproduction. This would cause prices to drop.

With at worst 80% of 2019, passenger numbers, airlines are expected to suffer. Due to fierce competition, prices will likely drop.

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