Aircraft lease rates near pre-COVID levels for narrow-body jets

Aircraft lease rates have regained altitude, led by smaller jets, as the rebound in global passenger numbers outpaces production slowed by labor shortages. The average lease price for the narrow-body Airbus A321-200neo in early January stood 0.6% above the level of January 2020, while the smaller A320-200neo had recovered to just 2.3% below where it was at the start of the pandemic, British aviation analytics company Cirium reports. Compared with January 2022, the rate for that A321 model increased 13% while the A320 rose 5.2%. Rates for the Boeing 737 MAX 8 rose 7.5% over January 2020, showing a strong recovery after the aircraft was grounded worldwide for much of 2020 following two deadly crashes. The IATA trade group expects global passenger numbers in 2023 to return to roughly pre-pandemic levels following the relaxation of COVID-19 border measures in many countries. Airlines are working to increase flights in response. The operating scale of North American airlines in January 2023 as measured by available seat kilometers -- the number of seats times flight distance -- rose 1.1% from the same month in 2019, surpassing pre-pandemic levels, the IATA reports. The figure for Latin American and European airlines was down about 7%. Carriers are once again expanding capacity. German airline Condor plans to lease two A320neo and 17 A321neo planes between 2024 and 2027 from U.S.-based Air Lease. Japan's Skymark will lease six 737 MAX 8s from fiscal 2025. But supply chain disruptions are causing delays. Boeing and Airbus are seeing aircraft deliveries postponed as labor shortages and other factors slow the production of engines and parts. Reuters and other media report delays averaging three to six months for production of jetliners. Supply hasn't been able to keep up with the recovery in demand, pushing up lease rates for used aircraft, said Rob Morris, global head of consultancy at Ascend, Cirium's aircraft appraisal unit.<br/>