Ever wondered how airlines get all those planes? behind the scenes, aircraft leasing companies purchase jets directly from Boeing, Airbus and other manufacturers. They then lease them out to the world‘s airlines for set periods of time.
Today over 40% of the global commercial fleet is leased rather than owned. As aviation continues booming, leasing has proven an efficient model allowing airlines to rapidly scale capacity without massive upfront capital. Aircraft lessors provide value not just with initial fleet financing, but also handling ongoing tasks like maintenance, insurance and remarketing of planes when leases expire.
This article provides an in-depth tour of the 10 largest aircraft leasing companies ranked by total fleet size. We’ll overview their histories, fleet breakdowns, notable deals and future outlooks. Read on for deeper insight into an essential, yet mostly unseen, industry fueling the growth of air travel worldwide!
Why Airlines Lease Aircraft
Leasing offers carriers major advantages over buying planes outright in terms of flexibility and cost:
- Avoids Large Upfront Payments: New planes cost $80M to $320M each. Leases allow growing without that burden.
- Upgrades Fleet Faster: Lessors place huge orders with manufacturers directly. Airlines get quicker access to latest models.
- Bundles Expenses: Insurance, maintenance reserves and remarketing value guarantees all included in lease rates.
- Adjusts to Market Changes: Typical 6-12 year lease terms allow capacity optimization as demand shifts.
As the charts below illustrate, leasing has surged from 25% of fleets in 2000 to ~40% today. Expect this trend to continue rising.
Chart: % of global fleet leased vs owned
2000: 75% owned vs 25% leased
2022: 60% owned vs 40% leased
Source: IBA GroupChart: Annual % of deliveries that were leased
2015: 45%
2022: 55%
Source: IBA GroupNow let’s get into profiles of the prominent players making aircraft leasing such a vital, high-flying industry!
#10 Aviation Capital Group (ACG)
Founded: 1989 \
Headquarters: Newport Beach, California \
Owned aircraft: 332 \
Managed aircraft: 118 \
Total fleet: 450
ACG has acquired and sold over $36 billion in aircraft. Their team hustles to lease planes in over 40 countries across the Americas, Europe and Asia-Pacific regions.
Most Popular Models: ACG maintains a diverse fleet from commercial narrowbodies like A320s and 737s to widebodies including 777s and 787 Dreamliners.
Fun Fact: ACG made history in 2016 landing the largest-ever single Airbus A320 family deal – $3.6B for 30 A321neo with delivery by 2023.
#9 Air Lease Corporation (ALC)
Founded: 2010 \
Headquarters: Los Angeles \
Owned aircraft: 354 \
Managed aircraft: 137 \
Total fleet: 491
Air Lease focuses exclusively on the latest tech narrowbodies including A320neo, 737 MAX and E2-Jet families. The company’s founder, Steven Udvar-Hazy, is considered the “founding father” of aircraft leasing when he started the industry‘s first lessor in 1973.
Notable Deals: ALC often partners with carriers on sales-leaseback transactions. Recent examples include $2.3B with American Airlines for 50 aircraft and $800M with Air Senegal for 8 new A220-300s.
Fun Fact: ALC’s initial public offering in 2011 was the first ever for an independent aircraft lessor and raised $964M.
Detailed profiles of top aircraft lessors including growth stats, fleet details, key partnerships, future outlook and more.
#8 Nordic Aviation Capital
#7 BBAM Aircraft Leasing
#6 BOC Aviation
#5 ICBC Leasing
#4 SMBC Aviation Capital
#3 Avolon
#2 GE Capital Aviation Services (GECAS)
#1 AerCapHow Do Aircraft Lessors Make Money?
Like leasing companies in other industries, aircraft lessors aim to profit from the spread between their cost of acquiring planes and the rental rates charged to airlines.
Lessors purchase directly from Boeing and Airbus to get fleet scale discounts. Typical new deliveries require 20% – 30% down payments. Funding comes from lessor’s equity capital and bank debt. Loans secured on planes usually cover 70% – 80% of aircraft value.
Typical aircraft leasing agreements bundle together:
- Lease Payments – monthly based on aircraft type & age
- Maintenance Reserves – airlines contribute to upkeep fund
- Insurance – lessor purchases coverage
- Remarketing – lessor arranges future sale or re-lease
Under 7-10 year terms, there are also options for airlines to purchase the aircraft. As planes age, lessors focus on managing the fleet – remarketing or selling older models then leasing newer generation replacements. Proactive portfolio management is key to maximizing investor returns.
Infographic: Typical aircraft lessor business model and economicsNotable Recent Deals
The aircraft leasing market continues its strong rebound in 2022 after a COVID slowdown. Lessors are striking major new transactions:
- BOC Aviation recently signed several deals over $1B, leasing 11 planes to Turkish Airlines, 6 jets to LATAM Airlines and 4 Dreamliners to Avianca.
- Air Lease continues expanding Korean Air’s fleet, leasing another 6 new Boeing 787-10 through 2029 worth $1.5B.
- SMBC Aviation Capital leased 9 more A320neo to Delta, continuing the airline’s fleet upgrade.
Deal activity should remain vibrant with over 9,000 aircraft expected to be delivered worldwide over just the next 5 years!
Industry Outlook Going Forward
Analysts forecast robust, sustained growth ahead for aircraft leasing:
Expanding Airline Fleets – Cirium predicts over 41,000 new jets worth $7.7 trillion will be delivered through 2041. Lessors will finance a large share.
Narrowbody Dominance – Single-aisle planes like A320neo and 737 MAX make up 70% of projected deliveries. Great news for top lessors already focused here.
More E-Enabled Models – Tech advancements improving operational efficiency, like real-time monitoring, self-diagnostics and predictive maintenance.
As travel recovers further from COVID slowdowns, look for eco-conscious travelers to embrace flight again. Aircraft lessors stand ready to deliver the fleet capacity enabling a soaring industry!
Top Aircraft Lessors Ranked by Total Fleet
| Rank | Lessor | Founded | Owned Aircraft | Managed Aircraft | Total Fleet |
|---|---|---|---|---|---|
| #1 | AerCap | 1995 | 1,570 | 186 | 1,756 |
| #2 | GECAS* | 1993 | 1,650 | 0 | 1,650 |
| #3 | Avolon | 2009 | 560 | 273 | 833 |
| #4 | SMBC Aviation Capital | 2001 | 518 | 217 | 735 |
| #5 | ICBC Leasing | 2007 | 468 | 200 | 668 |
| #6 | BOC Aviation | 1993 | 606 | 10 | 616 |
| #7 | BBAM | 1989 | 344 | 209 | 553 |
| #8 | Nordic Aviation Capital | 1990 | 278 | 197 | 475 |
| #9 | Air Lease Corporation | 2010 | 354 | 137 | 491 |
| #10 | Aviation Capital Group | 1989 | 332 | 118 | 450 |
Notes: *GECAS merged with AerCap in 2021 \
Source: Company reports, IBA Group
Aircraft leasing supports every flight you may take in the future. I hope this inside look at the prominent companies in the industry gave you a better sense of how these financial wizards cast their magic to keep those planes soaring!
Let me know if you have any other questions on this unique sector enabling the modern aviation industry as we know it.
