Unlocking Resilience and Revenue Generation: The Leasing Industry's Role in Powering the Aviation Sector's Recovery

Monday, July 3, 2023

Kevin Ducksbury, Head of Aircraft Leasing, Operations and Compliance at Air Partner, shares insights on the Aircraft, Crew, Maintenance & Insurance (ACMI) leasing industry’s ability to overcome obstacles and support revenue generation in the aviation sector's recovery

ACMI leasing plays a vital role in connecting the world, bridging gaps in capacity and fostering operational flexibility for airlines worldwide. However, the ACMI market, like many others, has faced its share of challenges in recent times. The COVID-19 pandemic inflicted severe turbulence on the aviation landscape, causing disruptions that echoed throughout the ACMI market. Travel restrictions, lockdowns, and plummeting demand left aircraft sitting idle, making it difficult for operators to cover costs and maintain fleet readiness. This scenario gave rise to a surplus of available aircraft in the market, leading to increased competition and pricing pressures.

However, even in the face of adversity, the ACMI market has proven its resilience. Post-pandemic, wet leasing experienced a rapid surge in demand, providing a solution to address crew shortages resulting from training backlogs. By leasing an aircraft along with its crew, airlines can effectively operate routes and meet customer demand. As the pandemic saw the industry lose an estimated 2.3 million workers globally, the ability to preserve continuity is vital as the industry continues to recover and adapt.

Kevin Ducksbury Profile

ACMI leasing stands out as a flexible solution to bridge capacity gaps in different regions. By placing aircraft and crew in counter-season territories, operators can maximise asset utilisation. For example, during winter periods when demand in Europe is low, deploying aircraft to regions like the Middle East, Asia, and South America ensures continued service and support for local operators. Temporary arrangements provide a valuable interim solution until operators can acquire their own aircraft or engage with longer-term leasing companies. This approach not only fosters collaboration but also enables clients to benefit from Air Partner’s access to a vast range of available aircraft during transitional phases.

Air Partner has seen a notable surge in demand for ACMI leasing from Asia, primarily driven by the annual Hajj pilgrimage. The Hajj, a significant Muslim pilgrimage that occurs every year, attracts millions of pilgrims from around the world to Saudi Arabia. This influx of travellers necessitates additional aircraft capacity to accommodate the high demand for transportation during this period. By providing reliable and flexible ACMI solutions.

Project leasing has emerged as a promising avenue to boost revenue generation and tourism in remote territories. By leasing aircraft to entities such as government agencies and hotel chains, direct services to popular destinations can be established, promoting tourism and enhancing connectivity. A notable trend has also emerged where flights are kept on standby to support the development of specific routes. For instance, a hotel chain in the Caribbean faced with challenges attracting tourists approached Air Partner to lease an aircraft. In this arrangement, the hotel chain assumes the responsibility for the aircraft lease and takes a strong commitment to ensure its successful operation. This innovative solution showcases the hotel chain's determination to overcome tourism challenges and underscores the significant role that project leasing can play in supporting the growth of tourism-dependent economies.

As the aviation industry continues to progress toward recovery, innovative leasing solutions play a crucial role in driving resilience and growth, allowing the industry to build a stronger, more vibrant ecosystem for the future.