Avolon has predicted that “structural undersupply” of aircraft will endure until the end of the decade, as the impact of the pandemic and airframer struggles to ramp-up production weigh on availability for years to come.
The Irish lessor’s observations – made in its 2024 outlook, which was released on 26 January – chime with those from many airline leaders regarding industry-wide supply-side constraints, which are clashing with strong and growing passenger demand for air travel. Crucially, Avolon suggests, some 3,400 aircraft were not built as a result of the pandemic and production challenges since.
Amid that dynamic, Avolon’s view is that the aircraft order cycle “likely peaked in 2023”, as carriers and lessors scrambled to secure delivery slots through to the end of the decade and, in some cases, beyond.
Those that are yet to commit to new orders, “risk lower growth rates and declining market share”, Avolon suggests.
That dynamic affects narrowbody and widebody aircraft, it says, and means that the value of already delivered aircraft is rising, alongside their service lives. The return to service of older aircraft types such as the Airbus A330ceo and A380 reflects this development, it says.
The market for new widebody aircraft is likely to remain tighter for longer, it adds, given “fewer widebodies will be built this decade than the last”. That is particularly noteworthy, it suggests, given the continued growth in international travel demand and congestion at many airports.
The average wait time from order to delivery of a new aircraft has now increased to around seven years, the lessor observes, noting that this is the longest gap seen since new-generation types entered service.
Avolon predicts a 15% rise in new large commercial aircraft deliveries in 2024, to 1,450 units, and expects that with the Covid-19 recovery nearing completion, more people will fly this year than ever before.
As part of its annual outlook, Avolon also scores its industry predictions from previous reports. Since 2020, it has made 25 headline predictions, its latest outlook shows, of which 19 are considered to have been fully realised.
Among its misses, Avolon suggested in January 2023 that China would “drive passenger traffic to 2019 levels by June” of that year. It did, however, correctly predict an acceleration of airline consolidation moves and that manufacturers would push back aircraft delivery rate targets.
Avolon expanded its single-aisle portfolio in December last year with an order for 140 aircraft, comprising 100 Airbus A321neos and 40 Boeing 737 Max 8 jets.
The company said the agreement took its delivery stream out to 2032.
It had firmed an order for 20 A330neos in September 2023.
