Lease rates have risen around 20-22 % from pre-COVID 19 levels as airlines have taken fewer deliveries of new aircraft and increasingly extend leases on their fleets, Ziemelis said in an interview.
Production delays by aircraft manufacturers have boosted carriers’ demand for leased planes to meet a spike in travel demand. The need to service older planes and for additional pilots and crew members has also benefited Avia, which provides aircraft, crew, maintenance and insurance (ACMI).
"We tripled our fleet (from pre-pandemic levels). We had more demand than we had aircraft this summer and potentially for next summer," Ziemelis said, adding that Avia expects to expand its fleet to 600 aircraft by 2027, from 220 currently.
According to Reuters, higher leasing rates have jacked up airlines’ operating expenses and shrank their profit margins, leading several carriers, including Ryanair, and Air France-KLM, to report weaker-than-expected results.