In a post-pandemic world brimming with optimism, the aviation industry is charting a swift course towards recovery. From Air India’s historic order of 470 planes in February to Riyadh Air’s daring endeavor to build a sizable fleet from ground zero, the industry’s revival is undeniable. Yet, the escalating travel demand has created a new challenge – a shortage of available aircraft. Airlines worldwide are now desperately seeking alternative strategies to bypass the elongated waitlists for brand new jets.
Alaska Air’s Airbus Sale
One such strategy is the pursuit of second-hand aircraft. A compelling example of this trend is Alaska Air Group Inc.’s ongoing attempt to offload its small fleet of 10 Airbus A321neo jets. These models, among the most sought-after, have attracted attention from numerous potential buyers, with American Airlines Group Inc. taking the lead, according to insiders. Several other airlines and leasing firms have also voiced their interest in these jets.
Cebu Pacific, recognizing the need for more aircraft and the delay in the delivery of new ones, has recently increased its leasing activities. They’ve added more aircraft to their fleet, including the NTU S7 Airbus A320neos, and most recently, they’ve brought on board an ex-Aer Lingus A320ceo (RP-C4162).
The industry’s quest for pre-owned jets is a direct response to the issue of dwindling airliner supply. With the waitlist for Airbus’s most popular single-aisle jets extending almost into the next decade and Boeing lacking immediate availability, the current scenario is strained. This shortage, exacerbated by supply chain disruptions, has put a spotlight on used aircraft as a viable alternative.
Facing Up to the Challenges and Prospects in the Market
Eddy Pieniazek, Head of Advisory at aviation finance data provider Ishka, notes, “The slower-than-anticipated recovery in new production implies that any spare or available capacity in the young and new build narrow-body fleet is being quickly absorbed.”
The industry’s struggle with supply disruptions also extends to major aircraft manufacturers. Boeing CEO Dave Calhoun expressed concerns in May about these disruptions potentially affecting the aerospace industry for over half a decade.
Simultaneously, wide-body aircraft are witnessing a newfound interest. Last month, Finnair Oyj revealed plans to lease two Airbus A330 planes to Australian flag-carrier Qantas for two years. Additionally, Deutsche Lufthansa AG purchased four retired LATAM A350s, augmenting their fleet of A350s previously used by Philippine Airlines. Not to be left behind, Air Canada has leased two A330s, earlier flown by Singapore Airlines, as a stopgap while awaiting their new orders.
The aviation industry’s robust response to the rising demand for air travel has triggered an intriguing global chase for used jets. As airlines seek these pre-owned aircraft to quickly accommodate the booming demand, a bustling secondary market has emerged. This trend highlights not just the industry’s ability to bounce back post-pandemic, but also its capacity to adapt and innovate in the face of challenges.
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