Finance
Global air financiers see jet shortages dragging on as values soar
Published by Global Banking & Finance Review®
Posted on January 24, 2025
4 min readLast updated: January 27, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 24, 2025
4 min readLast updated: January 27, 2026
Aircraft production delays are causing jet shortages, driving up values and lease rates, with potential industry consolidation on the horizon.
By Tim Hepher, Joanna Plucinska and Conor Humphries
DUBLIN (Reuters) -The world's largest aircraft lessors forecast on Monday that manufacturing delays would drag on until the end of the decade at least, keeping prices high and limiting the entry of new players into an industry that controls half of the world's jets.
The world's top lessors, all among the largest buyers of Boeing and Airbus aircraft, traded stories of crippling delays and sky-high lease rates paid by airline clients at the annual Airline Economics meeting in Ireland, where most of the industry is based.
"Neither Airbus nor Boeing have been able to meet any - and I say any - of their production targets. And so the delivery delays are cascading and have a domino effect," said Steven Udvar-Hazy, executive chairman of Air Lease and one of the founders of the leasing industry.
"We don't think that this recovery will be any shorter than three or four years to get back to normalcy."
Leasing companies have seen rentals and resale values for jetliners rise as airlines try to meet new demand at the same time as planemakers are struggling to recover from the COVID-19 pandemic.
For now, that means good profits for lessors and many airlines, since shortages push up demand and fares. But there are concerns over access to efficient new aircraft as supply chains lack parts and labour. Older second-hand planes have been in strong demand to fill the gap.
"The main question for the industry is the speed at which manufacturers will be able to ramp up deliveries. That will determine a lot of other things," said independent aviation adviser Bertrand Grabowski.
Delegates are split on how long the shortage will last.
"Several lessors and observers think the market can return to an excess of capacity after three years or so," Grabowski said. Others believe the removal of some 4,000 jets left unbuilt during the pandemic will keep airlines short of jets for longer.
Airbus and Boeing did not immediately respond to emails requesting comment.
Airbus is targeting production of 75 A320-family jets a month in 2027, having pushed back the goal repeatedly due to supply woes. Boeing is edging back towards 38 of the competing 737 MAX a month - an interim ceiling imposed by regulators following the blow-out of a door plug on a 737 MAX a year ago.
TARIFF TALK
Many of the roughly 3,000 delegates heading to the Irish capital were trying to weigh the potential impact of the change of power in the United States, a week before President-elect Donald Trump is sworn in for a second term, with some executives expressing optimism in his pro-business reputation.
Trump has promised to impose sweeping tariffs, which some analysts think could affect supply chains of aerospace and other industries while dampening air cargo demand.
The head of the world's second-largest lessor Avolon, Andy Cronin, said any impact on supply chains would be "unhelpful" at a time when airplane factories are struggling to meet demand.
While Avolon surged onto the scene in 2010, going public four years later, several speakers made the point that the need for an investment-grade rating and the huge delays in securing aircraft orders meant that the industry was more likely to consolidate around a handful of big players.
"It's just a bigger industry. It's more commoditized ... I think consolidation is inevitable," said Peter Barrett, CEO of Top 3 lessor SMBC Aviation Capital.
In December, airlines body IATA predicted record passenger numbers in 2025, with revenues set to reach more than a trillion dollars. But a recovery of travel from China and by business travellers has been slower than expected.
(Reporting by Tim Hepher, Joanna Plucinska, Conor Humphries and Padraic Halpin; Editing by Helen Popper and Sharon Singleton)
The article discusses ongoing jet shortages due to manufacturing delays and their impact on aircraft values and the aviation industry.
Experts predict that manufacturing delays and jet shortages will continue until the end of the decade.
Potential tariffs could disrupt supply chains, affecting aircraft production and air cargo demand.
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