Aircraft shortages turn into cash bonanza for some airlines

Aircraft shortages are turning into a moneymaker for some airlines as the dearth of supply allows carriers to sell new planes to leasing companies at much higher prices than they paid. Carriers such as Denver-based Frontier Airlines and Hungary's Wizz Air have reported gains up to hundreds of millions of dollars through selling planes after taking delivery and renting them back for their own use. These sale-and-leaseback transactions have long been a way for airlines globally to generate liquidity and ease the strain on their balance sheets. The tight airliner market has made these deals far more attractive, with US airlines this year accounting for 24% of global sale-and-leaseback transactions, up from 10% in 2022, according to Cirium Ascend Consultancy. Passenger carriers will receive 19% fewer aircraft this year than expected because of production issues at Boeing and Airbus, according to AeroDynamic Advisory. In addition, roughly 350 Airbus A320neo jets are expected to be grounded between 2024 and 2026 to deal with a flaw with RTX's Pratt & Whitney engines. As a result, new aircraft prices are 20% higher than the pre-pandemic period, said John Heimlich, chief economist at Airlines for America (A4A). Frontier this month reported a gain of $71m in Q1 from these deals, up 78% from last year. It will likely see similar gains in the current quarter, said Rob Morris, head of global consultancy at Cirium.<br/>