Recently, China Bohai Leasing, the world's second largest aircraft leasing company, announced that by the end of the first quarter of 2024, the fleet size of Avolon, a subsidiary of Bohai Leasing, had reached 1,033 aircraft, including 534 owned aircraft, 43 managed aircraft and 456 ordered aircraft, serving 145 airline customers in 64 countries around the world.
The development of the aircraft leasing industry can be traced back to the 70s of the 20th century, when industry pioneers such as GPA in Ireland and ILFC in the United States drove the industry's early growth. These pioneering aircraft leasing companies, which provide aircraft and aviation equipment leasing services, provide airlines with flexible capital utilization options, and contribute to the rapid development of the global aviation industry.
In contrast, China's aircraft leasing industry started relatively late, with the first aircraft leasing business not completed until December 2009 when ICBC Leasing, a subsidiary of the Industrial and Commercial Bank of China, completed the transaction. The two-year-old leasing company has introduced two Boeing B777-F long-range large freighters to China Southern Airlines through bonded leasing. Since then, this transaction has ushered in a new era of aircraft leasing in China.
Today, ICBC Leasing is the world's fifth-largest benchmark aircraft leasing company, with a fleet of 668 owned, managed and ordered aircraft in the first quarter of 2024, including a total of 515 aircraft in its owned fleet, including 34 turboprop regional jets, 424 narrow-body aircraft and 57 wide-body aircraft, and more than 30 aircraft in its managed fleet.
Currently, the global commercial aircraft leasing market is valued at $154.1 billion and is expected to grow at a CAGR of 7.3% from 2023 to 2033. The global market is expected to reach $315.9 billion by 2033, and the growth rate of the Chinese market is not surprisingly the highest in the world.
With the vigorous development of China's economy and the full recovery of the global civil aviation industry, China's aircraft leasing companies have spread their business across five continents and occupied an important market share, accounting for 33.87% of the world's total. According to the latest market data, 15 of China's largest leasing companies are among the top 50 aircraft leasing companies in the world, with a total fleet of 3,685 aircraft.
These include Bohai Leasing, ICBC Leasing, BOCOM Leasing, CDB Leasing, CMB Leasing, CCB Leasing, Kunlun Leasing, ABC Leasing, Minsheng Leasing, Industrial Leasing, and SPDB Leasing. Among the world's top 10 aircraft leasing companies, China has Bohai Leasing, BOC Aviation and ICBC Financial Leasing ranked second, fourth and fifth respectively.
Thanks to the rapid development of the global air transport industry, airlines are now becoming more popular than buying aircraft by leasing aircraft. In the 70s of the 20th century, the share of leased aircraft in the global fleet was about 10%, and by the end of 2023, this number has soared to 70%.
In particular, the period between 1980 and 2010 saw a particularly significant growth momentum, with the lease ratio exceeding the key level of 50% for the first time in 2004. In recent years, the proportion has remained at around 70 per cent, perhaps reflecting the "optimal" balance between leasing and ownership in the aviation industry.
However, in the Asia-Pacific region, where the global economy is most dynamic, the 70% balance between aircraft leasing and ownership is likely to be upset. This is mainly due to the rapid economic growth of the region, especially in countries such as China, India and Indonesia, where the aircraft leasing market has huge potential, and with the emergence of new airlines and the opening of new routes, the hire-purchase ratio is likely to reach a new high of 75%.
In the future, with the continuous development of the continental aviation industry and the further maturity of the financial market, especially the development of COMAC's aircraft leasing business, the continental aircraft leasing market is expected to continue to maintain rapid growth and further increase its share in the global market.