Askume, Sept 13 – Gediminas Ziemelis, chairman of Avia Solutions Group, which leases aircraft and provides related services, said on Friday he expected leasing rates to remain high for at least two years, allowing the group to expand further and increase profits.
Lease rates are about 20-22% higher than pre-COVID-19 levels as airlines deliver fewer new aircraft and extend fleet leases, Ziemelis said in an interview.
Airline demand for leased planes has increased to meet a surge in travel demand due to production delays by aircraft manufacturers. The need to repair older planes and add pilots and crew has also benefited Avia, which provides aircraft, crew, maintenance and insurance (ACMI).
“Our fleet size has tripled [from pre-pandemic levels]. This summer, and even next summer, our demand for aircraft is going to exceed the number of aircraft we have,” Ziemelis said, adding that he expects the fleet to reach 600 planes by 2027.
Higher leasing rates have pushed up airline operating expenses and squeezed profit margins, causing several airlines including Ryanair (RYA.I) and Air France-KLM (AIR.PA) to report weaker-than-expected results.
