Commercial Aircraft Leasing Market Forecast to Reach USD 278.13 Billion by 2031 Driven by Narrowbody Demand and LCC Expansion - Mordor Intelligence

Introduction

The commercial aircraft leasing market is projected to reach USD 278.13 billion by 2031, growing from an estimated USD 195.11 billion in 2026 at a CAGR of 7.35%. The market is witnessing steady growth as airlines increasingly adopt asset-light strategies to optimize balance sheets, while low-cost carriers (LCCs) expand globally. Supply constraints from major aircraft manufacturers like Airbus and Boeing have further increased demand for leased aircraft, making leasing an attractive option for both carriers and investors. The Asia-Pacific region continues to dominate revenue share, while the Middle East and Africa are emerging as the fastest-growing markets.

Leasing provides airlines with flexibility to manage fleet capacity without large capital expenditures. The trend of converting passenger aircraft to freighters (P2F) also presents a significant opportunity, supporting commercial aircraft leasing market growth. Investors are increasingly attracted to this segment due to predictable cash flows, lower exposure to operational risks, and potential for residual value appreciation.

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Key Market Trends

Rising Adoption of Low-Cost Carriers (LCCs): LCCs are driving increased penetration of leased aircraft. By minimizing upfront capital requirements, carriers like IndiGo and Southwest Airlines can scale rapidly and adjust capacity in response to market demand. The expansion of LCCs in emerging markets such as Southeast Asia, India, and sub-Saharan Africa supports sustained demand for narrowbody aircraft leases.

OEM Production Bottlenecks: Ongoing production constraints at Airbus and Boeing have tightened aircraft availability, pushing lease-rate factors higher and extending average lease durations. Airlines prefer longer-term leases to secure scarce aircraft, giving lessors greater pricing power and enhancing market stability.

Passenger-to-Freighter Conversions (P2F): The e-commerce boom has increased demand for freighter aircraft. Converting older passenger planes into freighters offers cost-efficient alternatives to new-build freighters, allowing lessors to capitalize on secondary leasing opportunities. This trend strengthens the commercial aircraft leasing market outlook.

Institutional Investment Growth: Leased aircraft provide predictable returns and resilience against economic cycles, attracting institutional investors. Rising lease-rate factors and long-term contracts enhance the appeal of aircraft leasing as a stable investment option.

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Market Segmentation

By Leasing Type
-Wet Lease
-Dry Lease

By Aircraft Type
-Narrowbody
-Widebody
-Regional Jets
-Freighter / P2F Converted Aircraft

By End-User
-Full-Service / Network Carriers
-Low-Cost Carriers (LCCs)
-Dedicated Cargo Airlines
-Charter and ACMI Operators

By Lease Duration
-Short-Term
-Medium-Term
-Long-Term

By Geography
-North America
-South America
-Middle east Africa
-Europe
-Asia pacific

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Key Players

AerCap Holdings N.V.

SMBC Aviation Capital

Avolon Aerospace Leasing Limited

Air Lease Corporation

BOC Aviation Limited

Conclusion

The commercial aircraft leasing market is set for steady growth through 2031, underpinned by LCC expansion, narrowbody dominance, and rising demand for freighter conversions. Supply limitations at aircraft OEMs and increasing institutional investment further enhance market attractiveness. The Asia-Pacific region will continue to lead in revenue generation, while the Middle East and Africa will offer high growth potential. Legal frameworks like the Cape Town Convention strengthen market stability and investor confidence.

The market is expected to maintain a balance between risk and return, making it an appealing option for airlines seeking flexibility and for investors looking for predictable cash flows. With increasing airline fleet expansion and cargo demand, commercial aircraft leasing remains a critical component of the aviation ecosystem, shaping the industry's operational and financial landscape.

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Mordor Intelligence is a trusted partner for businesses seeking comprehensive and actionable market intelligence. Our global reach, expert team, and tailored solutions empower organizations and individuals to make informed decisions, navigate complex markets, and achieve their strategic goals.

With a team of over 550 domain experts and on-ground specialists spanning 150+ countries, Mordor Intelligence possesses a unique understanding of the global business landscape. This expertise translates into comprehensive syndicated and custom research reports covering a wide spectrum of industries, including aerospace & defense, agriculture, animal nutrition and wellness, automation, automotive, chemicals & materials, consumer goods & services, electronics, energy & power, financial services, food & beverages, healthcare, hospitality & tourism, information & communications technology, investment opportunities, and logistics.

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