Freighter leasing market review and opportunities

As of today, there are approximately 31,000 active and stored regional, narrowbody and widebody commercial aircraft. The top 120 lessors worldwide have a combined fleet of about 13,000 aircraft, which amounts to about 42% of the world’s commercial airplane fleet. The top-10 lessors account for over 40% of the non-operator owned or financed fleet. The overall order book for new commercial jets stands at about 10,000 aircraft. Freighters make up approximately 8%-10% of the world’s commercial airplane fleet, depending on whether piston-powered utility aircraft and smaller turboprops are included. Currently, there are approximately 2,000 narrowbody, medium widebody and large widebody freighters in service or in storage. The in-storage share is low, at approximately 5% of the global fleet. With the current high level of demand, pretty much every freighter that can operate is operating. The role of lessors varies across the freighter business The role of lessors in the freighter business varies greatly across operators, customers, geography and aircraft type. Overall, about 25%-27% of the world’s freighter fleet is leased, depending on whether viewed from a customer or operator perspective. The distinction between customer and operator is important as almost two-thirds of the world’s freighter fleet is operating for only five customers: FedEx, UPS, DHL, Amazon and SF Express. While FedEx, UPS and SF Express operate most of their own capacity, DHL relies on large number of subcontractors to meet its lift requirements across the globe. FedEx and UPS provide business opportunities for subcontractors outside the United States, particularly in Europe, Canada and Mexico. But scope clauses in pilot contracts provide few opportunities for third parties on U.S. routes. The interactive dashboard below provides an overview of the importance of lessors across different geographies, customers, operators and aircraft types. The dashboard gives a true picture of the lessor penetration across the industry as it excludes intra-company leases, for example when one part of ASL Aviation Holdings leases to one of its own airlines. The dashboard provides a snapshot of the active and stored fleet as of the beginning of August 2021.

Some important takeaways from our analysis: The lessor share across integrators varies substantially: While FedEx, UPS and SF Express own almost all of their fleets, about 41% of the fleet operating for DHL is leased. Amazon has until now been geared entirely toward leasing its capacity, but this is changing with the purchase of 14 aircraft from Delta and Westjet at the end of last year. So far, 100% of the company’s operations remain outsourced. The narrowbody segment, at 31%, has the largest share of leased aircraft. Within the segment, the lessor share is highest for the 737-400 and the 737-800. Most 757s are owned and operated by UPS and FedEx. Of leased fleets, 41% are based in Europe, 20% in Asia and only 17% in North America. However, when excluding FedEx and UPS, more than half of the North American fleet is lessor-owned. Generally, the lessor share is higher for the newer generation than older generation types. For example, 31% of the world’s 777-200 freighter fleet is leased, but this number is 39% when FedEx is excluded. Top lessors Overall, we count almost 100 leasing companies with a total combined portfolio of 500 freighter aircraft. Only about eight of those companies have 10 or more aircraft in their portfolio. This includes GECAS with 77; CAM with 74; Vx Capital Partners with 38; Titan with 27; DAE Capital with 13; Automatic with 12; and Airwork and BBAM with 10 apiece. The most popular leased aircraft are the 767-300, 737-400, 777-200 and 747-400. The current backlog of conversion orders will lead to changes over time, particularly for the 767-300, 737-800, A321-200, and the A330-300, the latter which is beginning to rack up orders. As of late August, the known backlog of 767-300s was around 50 aircraft, mainly for CAM and LATAM Group. The announced A330 backlog is about 40 aircraft, around 20 of which are attributable to CAM. The A321-200 backlog is about 50 aircraft, with BBAM emerging as the largest customer for the type with about 18 outstanding orders, which also potentially could include A320s. The biggest backlog is for the 737-800, which currently stands at well over 100 units. Most of the customers in this segment are leasing companies, including GECAS, BBAM and Aero Capital Solutions. Risk and opportunity Much of the order activity related to the 737-800, A330-300, and to a lesser extent the A321-200, is speculative. The 767-300 backlog, on the other hand, appears to be largely committed, partly thanks to Amazon’s hunger for aircraft. While the 777-300ER will also provide opportunities for lessors, the in-service date is a few years away. It is worth reminding ourselves that although there is a large operator based for narrowbodies and medium widebodies, the vast majority of these types operate for on behalf of FedEx, UPS, DHL, Amazon and SF Express, whose capacity requirements will cap the number of aircraft required in those segments. The figure below shows the freighter fleet by operator business model in each category. (A)CMI operators tend to operate for either DHL, Amazon or outside the United States for FedEx or UPS. The customer base in the large widebody segment is less concentrated, with combination carriers and all-cargo carriers accounting for a much larger share of operating capacity. The biggest potential upside from a lessor perspective is to crack into FedEx and UPS, which operate a combined 660 aircraft, only 2% of which are leased. FedEx also has a backlog of around 50 new 767-300 freighters. So far, FedEx and UPS have not made moves to switch from owning to leasing, although UPS has been leasing additional capacity from CAM during the past years, partly because of the need to get additional capacity quickly. However, as we come out of the pandemic — and the topic of MD-11, A300 and 757 fleet renewal becomes part of the agenda — this could create opportunities for A330 and A321 lessors. With a sunset date on the 747-8 program next year, UPS will also have to start considering options for its future widebody fleet. Options are few and far between, but there is potential for the 777-300 to enter this space and, for what it’s worth, Airbus has announced an A350 freighter program, albeit one that is light on detail. There is also increased interest from combination carriers, both with and without existing freighter fleets in freighter capacity. This will provide opportunities for leasing companies geared toward smaller customers, who can offer a product that includes capabilities and service on the maintenance side.

Cookie	Duration	Description
34f6831605	session	General purpose platform session cookie, used by sites written in JSP. Usually used to maintain an anonymous user session by the server.
a64cedc0bf	session	General purpose platform session cookie, used by sites written in JSP. Usually used to maintain an anonymous user session by the server.
ARRAffinity	session	ARRAffinity cookie is set by Azure app service, and allows the service to choose the right instance established by a user to deliver subsequent requests made by that user.
ARRAffinitySameSite	session	This cookie is set by Windows Azure cloud, and is used for load balancing to make sure the visitor page requests are routed to the same server in any browsing session.
cookielawinfo-checkbox-advertisement	1 year	Set by the GDPR Cookie Consent plugin, this cookie is used to record the user consent for the cookies in the "Advertisement" category .
cookielawinfo-checkbox-analytics	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional	11 months	The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
crmcsr	session	General purpose platform session cookie, used by sites written in JSP. Usually used to maintain an anonymous user session by the server.
JSESSIONID	session	The JSESSIONID cookie is used by New Relic to store a session identifier so that New Relic can monitor session counts for an application.
PHPSESSID	session	This cookie is native to PHP applications. The cookie is used to store and identify a users' unique session ID for the purpose of managing user session on the website. The cookie is a session cookies and is deleted when all the browser windows are closed.
viewed_cookie_policy	11 months	The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.

Cookie	Duration	Description
_zcsr_tmp	session	Zoho sets this cookie for the login function on the website.
e188bc05fe	session	This cookie is set in relation to Zoho Campaigns
iamcsr	session	Zoho (Customer Support) sets this cookie and is used for tracking visitors (for performance purposes)
WFESessionId	session	This cookie is necessary to enable a Power BI session, a Microsoft tool that helps visualize data.

Cookie	Duration	Description
_ga	2 years	The _ga cookie, installed by Google Analytics, calculates visitor, session and campaign data and also keeps track of site usage for the site's analytics report. The cookie stores information anonymously and assigns a randomly generated number to recognize unique visitors.
_gid	1 day	Installed by Google Analytics, _gid cookie stores information on how visitors use a website, while also creating an analytics report of the website's performance. Some of the data that are collected include the number of visitors, their source, and the pages they visit anonymously.

Freighter leasing market review and opportunities

Air transport drives e-commerce expansion in Latin America

Preview: Global e-commerce logistics outlook

Related Posts

Air express shipment growth moderates after several strong years

Stored freighters dwindling as demand stays high

More than 1.4B lbs of material flown to and from Hawaii in 2021

On-time parts availability will remain key challenge for MRO companies

Preview: Global e-commerce logistics outlook

Privacy Terms

ADA Compliance

Welcome Back!

Retrieve your password

Freighter leasing market review and opportunities

You need a subscription to access this premium content!

Air transport drives e-commerce expansion in Latin America

Preview: Global e-commerce logistics outlook

Related Posts

Air express shipment growth moderates after several strong years

Stored freighters dwindling as demand stays high

More than 1.4B lbs of material flown to and from Hawaii in 2021

On-time parts availability will remain key challenge for MRO companies

Preview: Global e-commerce logistics outlook

Privacy Terms

ADA Compliance

Welcome Back!

Retrieve your password