Analysts are predicting significant headwinds for aircraft lessors in 2021 as more than 1,000 aircraft are expected to be returned to their bank and lessor owners without clear options for onward placement.
In a webinar on 20 September, IBA outlined how before the start of the pandemic operators planned to return about 1,300 aircraft, including 200 widebodies, to their lessors in 2021. IBA believes that while those operators would likely have extended the majority of those leases, that option now appears extremely unlikely.
IBA forecasts that, due to the drop in demand caused by the Covid-19 pandemic, the vast majority of those aircraft will not secure follow-on leases. With airline failures and increasing numbers of airlines looking to terminate longer leases earlier due to restructuring, the number of aircraft returning to lessors without onward placement will only increase, said IBA.
As a result of the uncertainty, the model established in recent years of seamless redeliveries between lessees will likely break, and IBA expects a higher level of disputes between airlines and lessors around lease returns and redeliveries.
IBA also forecasts that the fall in aircraft leasing activity will drive a corresponding fall in engine shop visits. Prior to Covid-19, IBA forecasts called for those visits to rise from 3,200 in 2019 to 4,500 by 2023. It now projects only 1,000 shop visits this year, and it will take until 2026 to reach the originally forecast 2019 levels. As a result, IBA expects MROs to introduce more flexibility into their shop visit programmes.