DUBLIN (Reuters) - The head of the world's second largest aircraft leasing company SMBC Aviation Capital expects a shortage of new aircraft to continue until at least 2026 and possibly beyond.
Aircraft manufacturers struggled to increase production after COVID-19 lockdowns and SMBC CEO Peter Barrett said recent engine difficulties have "significantly" exacerbated that challenge, notably the latest snag to hit RTX's Pratt & Whitney Geared Turbofan (GTF) engines.
Aicraft lessors are major buyers of aircraft. SMBC, which is owned by a consortium including Japan's Sumitomo Corp and Sumitomo Mitsui (NYSE:SMFG) Financial Group, placed an order for 60 Airbus planes last month, bringing its fleet to close to 1,000.
"Our view has been for the last 12 or 18 months that this is going to be a continuing challenge for at least a number of years, I see it going well out into '25, '26 and possibly beyond," Barrett told the Airline Economics trade publication in an interview broadcast on Monday.
On GTF engine problems, he said: "We hope and believe that we know the extent of that at this stage. I think our customers are all coming to terms with what it's going to mean for them in a practical sense. It's going to make '24 and probably the early part of '25 a challenge for some of those operators".
The constrained supply along with increased travel demand and higher interest rates have contributed to lease rates rising by 20%-30% in dollar terms over the last year, Barrett said.
He added that airline travel would likely grow at a more modest rate in 2024 following a bumper 2023.