Demand for Narrowbody Aircraft Exceeds the Available Supply
Outside of Asia, summer travel has seen a large recovery and this has coincided with a large uptick in demand for narrowbody aircraft by both airlines and lessors. Many airlines and lessors used the Covid-induced travel downturn as an opportunity to turnover their fleets to favor newer, more fuel-efficient aircraft. Delivery delays from Airbus and Boeing have meant that this process has not always gone to plan and many commentators believe there is a looming shortage of narrowbody aircraft. This supply constraint, along with an overall increase in interest rates, has already led to an increase in lease rates (especially for narrowbody aircraft) and we expect that this trend will continue.
Capital Markets – A Game of Wait and See
Capital markets debt activity has been quiet for the majority of 2022. Only two ABS deals have gone to market since Russia invaded Ukraine on February 24th