HomeAir LineAirlines get rich from the sale and rental of their fleets

Airlines get rich from the sale and rental of their fleets

There are no planes. Boeing and Airbus cannot cope and the market does not stop growing. The demand is uncontrolled. Having the right to receive aircraft from manufacturers is a privilege. And leasing companies that rent aircraft are desperately looking for them (Boeing and Airbus delays hit airlines).

With this situation, some airlines are saving their financial situation by selling their fleets and re-leasing them. This is the case of Wizz Air or Frontier, both owned by the IndiGo fund.

The sale of aircraft and subsequent leasing has always been a way for airlines to obtain liquidity. This is what Easyjet did with the pandemic.

Used aircraft are paid for at prices determined by supply and demand. Demand is runaway and supply is very low, so business for airlines is important.

The problem of the lack of aircraft is aggravated by the need to ground a multitude of A320s for overhauls of the Pratt & Whitney engines, which have a problem in the composition of the alloys of their materials. This increases the price of a plane by up to 20 percent (Wizz Air breaks its record with 50 planes out of service).

Look at the case of Frontier: it made $71 million by selling its fleet and renting it out. Wizz Air earned 245 million euros in this way. The two airlines are now awaiting delivery of new aircraft because their 2021 orders have reached delivery time. Frontier expects 200 by 2029.

Source: Preferente



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