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.
