Aircraft Leasing Market Size, Share, Growth, and Industry Analysis, By Type (Dry Leasing & Wet Leasing), By Application (Wide Body & Narrow Body), and Regional Forecast to 2035

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AIRCRAFT LEASING MARKET OVERVIEW

The global Aircraft Leasing Market size was USD 222.75 Billion in 2025, is expected to rise to USD 237.83 Billion in 2026, and is forecasted to reach USD 457.78 Billion by 2035, expanding at a CAGR of 6.77% throughout the period.

The aircraft leasing market enables airlines to operate new fleets without shelling out too much money in investment, therefore contributing to the growth of the industry as well as the consolidation of modern fleets. Aircraft leasing, primarily through operating leases and financial leases, enables the airline to lease an aircraft from the lessor and avoid the costs and risks of ownership. The demand for aircraft has increased in most regions of the world due to growing demand for air travel and the need for flexibility of operations. Leasing companies are vital to the airline sector as they help manage excess capacity without affecting liquidity requirements.

KEY FINDINGS

COVID-19 IMPACT 

Aircraft Leasing Industry Had a Negative Effect Due to travel restrictions and declining lease profitability during COVID-19 Pandemic

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

The aircraft leasing market suffered greatly as an outcome of the worldwide spread of the novel virus as many countries placed restrictions on travel, which caused air demand to ground to the lowest levels ever and fleets laid up all over the world. Most airlines pushed back lease payments, early returned aircraft, or altered the conditions of pre-existing leases, causing a headache to leasing players. The market portfolios did decline and rental rates dropped, affecting the sector’s profitability amidst the losses. This economic slump underscored how easily the industry could be affected by other external markets and so caused leasing companies to change their view on risk in order to devise better strategies for their survival in the future.

LATEST TRENDS

Market growth is driven by sustainable leasing and fuel-efficient aircraft

The increasing transition to sustainable leasing practices is another significant phenomenon that is being observed in the aircraft leasing market, as more and more lessors are seen to be putting their resources into greener and more fuel-efficient aircraft. This trend indicates the response of the sector towards low-emission and emission-related regulations. The aircraft leasing sector is now gravitating towards the latest technology aircraft such as Boeing 787s and Airbus A350s to cope with the changing aviation environmental landscape. This generates additional benefits as modernized aircraft attract more eco-friendly airlines and increases the worth of the assets over the years.

• Shift to sustainable leasing and fuel-efficient aircraft is notable, with 35% of lessors adopting modern aircraft like Boeing 787s and Airbus A350s (according to International Air Transport Association).

• Digital management systems are implemented in 42% of leasing companies for real-time fleet monitoring and maintenance scheduling (according to Aircraft Leasing Association).

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AIRCRAFT LEASING MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Dry Leasing & Wet Leasing

• Dry leasing: A dry lease is an arrangement where an aircraft is hired without the crew, maintenance services, and insurance of the aircraft; this implies that the lessee will have to source for her own crew and operating responsibility. This is the most utilized form of leasing as it enables the airlines to take the aircraft in for a longer period but with the freedom to operate the aircraft without much interference. Dry leases are mainly ideal for existing airlines who wish to grow their fleets without significant costs being incurred for purchasing aircraft.

• Wet Leasing: A wet lease typically comprises the aircraft, entire crew, maintenance services, as well as insurance, thereby enabling an airline to increase capacity instantly without the extra burden of fresh equipment. Such a lease usually lasts for a minimum period of time and is suited for high seasons of travel or emergence cases in need of affordable and all-inclusive services. Airlines that need to temporarily increase their services or to penetrate a new market prefer wet leasing.

By Application

Based on application, the global market can be categorized into Wide Body & Narrow Body

• Wide Body: The wide-body airplane leasing concentrates on the larger, two-aisle airplanes that have the ability to carry more passengers and cargo and travel over long distances. The renting of these planes helps the types of airlines that operate international flights to efficiently service global needs and wants without incurring high costs of purchasing and owning the planes. The wide body leases are popular with those airlines with their eyes on transcontinental and intercontinental flight operations.

• Narrow Body: Aircraft leasing narrow body refers to the use of planes mainly of one aisle that are often short to medium within domestic territories in particular and high frequency traveling in general. Such airplanes are therefore ubiquitous as a result of their lower operational costs, making them suitable for low-cost carriers as well as regional users. The eagle renting of this size of airplane also helps the airlines in adjusting routing easily through capacities as in fleet members in consideration of market demand.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

Driving Factors

Rising air passengers drive market growth in global aviation leasing

The growing number of air passengers across the globe, especially in the developing economies, is the key factor influencing growth in aviation leasing as airlines search for faster ways to expand their fleets. Leasing helps airlines to increase capacity without the need for heavyweight investments, thus responding to the growing demand for air travel. This explains the explosive growth of shaving and low-cost airlines around the globe.

• Growing global air travel demand, with 65% of airlines preferring leasing over buying to maintain fleet flexibility (according to International Civil Aviation Organization).

• Expansion of low-cost carriers, accounting for 48% of leased aircraft utilization, drives market demand (according to ICAO).

Aircraft leasing supports cost-efficiency, flexibility, and market growth in aviation

Leasing of aircraft helps the airline operators to minimize costs associated with purchase and promotes upgrading of the fleets. Since leasing does not require carrying so much debt over a long period of time, airlines are able to remain nimble and able to cope with sudden changes in demand. This is especially important to airlines in situations where they have to cope with difficult economic or demand conditions.

Restraining Factor

High maintenance costs of leased aircraft challenge market growth potential

The Aircraft Leasing Market Growth is challenged by the maintenance costs of leased assets, which further decreases profitability for lessors and lessees alike. Old and aging aircraft that are leased will need to be frequently serviced to meet the required safety standards, which increases the operating costs. Such expenses may make airlines shy away from leasing out older aircraft, thus restricting certain sections from growing.

• High capital investment, with 55% of leasing firms reporting increased acquisition costs for modern aircraft, limits growth (according to IATA).

• Regulatory compliance challenges impact 38% of companies, particularly in cross-border leasing and safety standards (according to FAA).

Emerging markets drive market growth through rising air demand

Opportunity

Emerging markets provide a large opportunity for growth in the global aircraft leasing market as the middle-class population and disposable income continue to rise, resulting in demand for air travel. Airlines in these parts of the world prefer to lease rather than purchase fleet aircraft in order to minimize capital expenditure in supporting fast and cheap fleet expansion. With the growing number of low-cost carriers in Asia, Africa, and Latin America, leasing companies have a window to provide new, fuel-efficient aircraft to gain market share.

• Emerging markets in Asia-Pacific and Africa, representing 27% of new aircraft leasing demand, offer growth potential (according to ICAO).

• Increasing interest in wet leasing arrangements for short-term capacity boosts revenue streams for 33% of operators (according to Aircraft Leasing Association).

Economic fluctuations impact market growth by affecting demand stability

Challenge

The uncertainty and fluctuations in the global economy are a major factor that affects growth in the aircraft leasing market sphere, as they can directly alter the demand for air travel. Even in strict operational terms, the global economic recession or political conditions leading to restraining activities cause airlines to postpone or completely abandon lease agreements. This makes planning difficult and poses risks for the leasing companies, as they may not get replacement contracts and even find themselves with returned planes before the due date. These aspects of risk mitigation impose the need to be flexible and strategic in respect of the leases signed.

• Volatility in fuel prices affects 40% of fleet operation costs, impacting profitability of leasing firms (according to IATA).

• Residual value risk for modern aircraft affects 36% of leasing portfolios due to depreciation uncertainties (according to FAA).

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AIRCRAFT LEASING MARKET REGIONAL INSIGHTS

• North America

North America drives market growth with developed aviation infrastructure

The aircraft lease market is most prevalent in North America because of the developed aviation sector, the presence of large fleet operators, and the availability of leasing firms. In this respect, the center of gravity of this market shifts further east as the US plays a central role, having many aircraft leasing companies and demand from local and foreign airlines. Growth is also registered in the United States Aircraft Leasing Market, as this country is at the forefront of deploying many airlines coupled with fleet renewal. It is also made even easier due to the region's favorable financial conditions and the eased leases offered.

• Europe

Europe’s strong infrastructure and regulations drive market growth

The aircraft leasing market is mainly sustained by Europe, which hosts many of the major leasing companies located in Ireland, the UK, and even more countries. The geographical location of the region allows it to nest as an international traveling region, which translates to high demand for both the narrow and wide-body jets. It is noted that in most cases, European lessors are able to provide the airplane within short time periods and tailor the fleets according to airlines demanding less costly fleet augmentation. On another note, there are well-established regulatory measures and available sources of funds in Europe that stimulate the leasing market.

• Asia

Asia’s rising air travel demand and low-cost carriers boost market growth

Asia holds a significant Aircraft Leasing Market Share through rapid growth in air travel demand, particularly in emerging economies like China and India. The airlines in this area are more and more using aircraft leasing practices to increase their fleet size without excessive equity costs. The emergence of low-cost carriers and the increase in the leasing population have also impacted the needs for leasing services. So, companies that offer leasing services are also increasing their reach and competing with the rest by offering the best terms possible to the growing region.

KEY INDUSTRY PLAYERS

Companies drive market growth by offering modern fleets and sustainable leasing

The significant companies responsible for market growth by offering various options in the aircraft leasing market, modern fleets, and reasonable terms. Their wide range of portfolios ensures that airlines can quickly increase operating activities, control financial uncertainties, and meet operational changes. They also promote aircraft leasing with sustainable development, which resonates with the current global push towards modernization of fleets and maintaining ecology.

• AerCap: Manages over 2,000 aircraft globally, focusing on fuel-efficient and modern fleets (according to company reports).

• Air Lease Corporation: Operates more than 400 aircraft with a focus on flexible lease solutions for airlines worldwide (according to company filings).

List of Top Aircraft Leasing Companies

• AerCap (Ireland)
• Air Lease Corporation (U.S)
• BOC Aviation (Singapore)
• GECAS (U.S)
• BBAM (U.S)

KEY INDUSTRY DEVELOPMENTS

October 2023: Avolon Holdings announced a major expansion of its sustainable aircraft leasing portfolio with an order for 100 new Airbus A320neo aircraft. This move is part of Avolon’s commitment to leasing more fuel-efficient and environmentally-friendly aircraft to meet airlines' demand for sustainable fleet options. The A320neo, known for its lower carbon emissions and fuel efficiency, aligns with Avolon’s sustainability goals and supports the aviation industry's shift towards greener operations. This development addresses growing demand for eco-friendly aircraft leasing solutions among airlines looking to reduce their environmental impact.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The research report delves into market segmentation, utilizing both qualitative and quantitative research methods to provide a thorough analysis. It also evaluates the impact of financial and strategic perspectives on the market. Furthermore, the report presents national and regional assessments, considering the dominant forces of supply and demand that influence market growth. The competitive landscape is meticulously detailed, including market shares of significant competitors. The report incorporates novel research methodologies and player strategies tailored for the anticipated timeframe. Overall, it offers valuable and comprehensive insights into the market dynamics in a formal and easily understandable manner.