Avolon says 43,000 new air­craft to be de­liv­ered over next 20 years

The Irish Times - - Business News - FIONA REDDAN

Air­craft les­sor Avolon ex­pects 43,000 new air­craft to be de­liv­ered over the next 20 years, as air­lines in­vest in fuel-ef­fi­cient tech­nolo­gies. Given the need for fund­ing to fi­nance th­ese de­liv­er­ies, the les­sor ex­pects the mar­ket share of leas­ing com­pa­nies to ad­vance also.

The Ir­ish-head­quar­tered les­sor is fore­cast­ing con­sid­er­able growth ahead for the avi­a­tion sec­tor. Not­ing in its World Fleet Fore­cast, Dick Fors­berg, Avolon’s head of strat­egy and au­thor of the pa­per, said: “The growth fun­da­men­tals of the air­line in­dus­try re­main strong for next two decades, and we ex­pect that the cy­cles for air­craft or­ders and de­liv­er­ies will con­tinue to move in line with the broader eco­nomic cy­cle.”

This means it ex­pects 43,000 new air­craft to be de­liv­ered over the next 20 years, with the world jet air­liner fleet dou­bling to 51,800 air­craft by 2036.

Avolon also pre­dicts that, as air­lines con­tinue to de­velop their fleets by in­vest­ing in the youngest and most fuel-ef­fi­cient air­craft avail­able to the mar­ket, more than 16,000 air­craft will re­tire from air­line ser­vice over the pe­riod, with 40 per cent of fu­ture de­liv­er­ies sup­port­ing fleet re­place­ment and 90 per cent of de­liv­er­ies be­ing fu­ture tech­nol­ogy mod­els.

On the fund­ing side, Avolon ex­pects some $4.3 tril­lion in ad­di­tional fi­nanc­ing will be re­quired, with $700 bil­lion needed over the next five years and an av­er­age of $170 bil­lion an­nu­ally over the next decade.

“In or­der to meet th­ese sig­nif­i­cant needs, the roles of the var­i­ous liq­uid­ity providers will con­tinue to evolve, with op­er­at­ing lessors’ mar­ket share in­creas­ing from 40 per cent to 50 per cent, over time, sup­ported by in­creased par­tic­i­pa­tion by cap­i­tal mar­kets and new in­vestor classes,” Mr Fors­berg said.

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