Air travel has been a bit of a challenge in recent months.
There have been thousands of flight cancelations and delays, there are staffing issues, and some airlines are even cutting routes. Other airlines are merging or adding routes, though, so it’s not all bad in terms of options for customers. If you’ve noticed that prices for plane tickets have been rather high lately, you’re not alone. And, we might now know part of the reason for the high costs.
A tight supply of aircraft is causing the price airlines pay to rent planes to go up, according to CNBC.
The rent on a new Boeing 737 Max went up to $316,000 a month in July, which is more than 20% what it was in April 2020, according to IBA Group, an estimates aviation advisory. The Airbus A320neo went up to $324,000 a month, which is up over 14% from what it was in April 2020. The bigger version, the A321neo, was renting for $375,000 per month in July.
Aircraft leasing firms like Air Lease, Avolon, and AerCap seem to be the ones benefiting from these price increases.
Leasing firms own of manage more than half of the world’s 23,000 single- and double-aisle jetliners, according to Cirium, an aviation consulting firm, says CNBC. Many airlines do own their aircraft, but some carriers do rent their planes, or have a combination of owning and renting.
Airlines are already dealing with high inflation in addition to these higher costs. Aircraft rents are approaching or surpassing prices from 2019 and are supposed to get even higher. The rise of oil prices is also not helping. A lot of airlines are extending their leases on their plane rentals as well, as new planes are hard to find.
Executive chairman of Los Angeles-based Air Lease Steven Udvar-Hazy told CNBC that the company’s lease extension rate is approaching 90%, which has never happened before. It’s usually between 65-75%.
The demand to rent planes also comes from airplane production issues. Boeing and Airbus are still recovering from their production halt that happened in the early part of the pandemic as well as dealing with supply chain issues.
According to the International Air Transport Association’s latest available data, global passenger traffic went up 76% in June of this year compared to June 2021. But, it is still down about 29% compared to what it was before the pandemic.
So, what we’re looking at right now is a shortage of aircraft and a rising demand, which could definitely affect costs. We’ll keep an eye on the situation and bring you any updates you need to know.
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The post Airplane Rentals Are Going Up — Here’s What That Means For You first appeared on the disney food blog.