Wednesday, October 22, 2014

After huge jet orders, budget airlines eye rich seam of aircraft leasing

Singapore/Paris: From Scandinavia to Southeast Asia, low-cost airlines have ordered record numbers of planes in recent years, redefining the jet industry. Now they plan to lease out scores of their new planes, re-ordering the aviation business all over again.

Between them, Indonesia`s Lion Air, Malaysia`s AirAsia and Norwegian Air Shuttle have ordered more than 1,400 Airbus and Boeing jets, worth about $140 billion at current list prices. They`re about to test the growing market for rented planes, competing with established finance firms that lease out aircraft to cash-strapped carriers from China to the United States.

Jet makers and the finance companies which dominate aircraft leasing question whether budget airlines have the know-how to succeed, and some in the industry wonder whether they have simply ordered more planes than they need. But the low-cost carriers` sights are trained on new revenue streams, and net profit margins of about 20 percent enjoyed by global aircraft lessors - well above the airline industry average.
22/10/14 Reuters/ZeeNews
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