Aircraft rental costs soar as industry struggles with manufacturing delays

The cost of renting the newest aircraft has surpassed pre-pandemic levels as airlines struggle to balance demand for travel with persistent shortages and manufacturing delays. More than half of the world’s commercial aircraft are owned by leasing companies, which have been able to increase their rates significantly for the most in-demand Airbus and Boeing single-aisle aircraft that are used for short and medium-haul flights. Monthly lease rates for the Airbus A321neo have risen from lows of around $340,000 at the height of the pandemic in 2020 to as much as $420,000, marginally higher than before Covid-19 brought the industry to a standstill, according to aviation data group Ishka. Rates for Boeing’s newest single-aisle jet, the 737 Max 8, have also risen above pre-pandemic levels to around $360,000-$370,000 a month. “Air traffic is up and the manufacturers just can’t deliver fast enough,” said Eddy Pieniazek, head of analytics at Ishka. “Whatever can fly in the narrow-body market at the moment is flying.” Demand is also growing for the more expensive widebody aircraft that are typically used for long-haul travel, which did not recover as quickly coming out of the pandemic.  Pieniazek said leasing rates could climb further, noting there was “scope for a little bit more on the narrow-body front” but that much would depend on what airlines could afford at a time when other costs, notably fuel and labour, were also on the rise.  Leasing companies also have costs to balance, especially of debt at a time of rising interest rates. <br/>