Will Lessors Adjust Fleets Toward Narrowbodies And Regional Aircraft?

Airbus A350
Credit: S. Ramadier/Airbus

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With demand for international air travel expected to lag domestic travel in the pandemic recovery, will lessors recalibrate their fleets away from widebodies toward narrowbodies and regional aircraft?

Jens Flottau, Aviation Week’s executive editor for commercial aviation, responds:

Lessors have always tried to focus on fleets that are standardized and can handle high volume. That makes it easier to transfer aircraft leases and lowers risk.

Even in better times, widebody aircraft were nowhere close to meeting these criteria. Their cabins tend to be more differentiated than those on short-haul aircraft, making the transports harder to remarket. With demand for widebody aircraft having all but evaporated for now, it is safe to assume that lessors will abstain from placing new widebody orders for several years. As a result, it is conceivable that the widebody share of leased fleets could become significantly smaller over time.

There are type-specific issues as well. The Boeing 787 leasing market is in trouble, partly because of Norwegian’s decision to exit long-haul flying. The Boeing 777X and Airbus A350-1000 look too big for current requirements. And though the Airbus A330neo has a substantial share of lessor orders, it has not been nearly as popular as Airbus had hoped and has a number of questionable commitments from airlines such as AirAsia X, Iran Air and Hainan Airlines.

Another trend to watch is the advent of long-haul narrowbody flying, particularly with the Airbus A321XLR. The A321—and a potential twin-aisle challenger that Boeing might respond with—could pose another challenge to larger widebodies.

Regional aircraft are produced at much lower volumes than narrowbodies and are inherently unattractive for most lessors. Though there are some exceptions—Nordic Aviation Capital specializes in the segment—regionals are likely to remain unappealing for the leasing market’s biggest players.

Jens Flottau

Based in Frankfurt, Germany, Jens is executive editor and leads Aviation Week Network’s global team of journalists covering commercial aviation.