Industry sources indicate that aircraft lessors are looking at 12 month lease extensions for Boeing 737-800s from the September-October timeframe, when many extended lease for six months due to the 737 MAX grounding to maintain interim lift for airline customers expire. This compounds both the decision processes for airline fleet planners as well as potential impacts the Boeing 737 MAX delivery skyline once deliveries resume.
Analysis
If you are an airline and your MAX is grounded, you need interim lift to maintain your schedule. While in many cases MAX arrivals were for growth, in others they were to replace older aircraft. Keeping those older aircraft on the flight line could require a lease extension, and most lessors provided six month extension to their customers.
Of course, with high demand, lease rates for the 737-800
have risen significantly in the last few months, up $50,000 per month from earlier this year. But lessors don’t like the uncertainty of short-term leases, and like to re-market their aircraft on a schedule, over time, as leases terminate. Extending a number of leases that end at the same time will likely produce a market glut when the MAX re-enters service, and lessors want to maximize their revenues and minimize the impacts of re-marketing in a market with a supply imbalance.
Industry sources indicate that aircraft lessors are looking at 12 month lease extensions for Boeing 737-800s from the September-October timeframe, when many extended lease for six months due to the 737 MAX grounding to maintain interim lift for airline customers expire.This compounds both the decision processes for airline fleet planners as well as potential impacts the Boeing 737 MAX delivery skyline once deliveries resume.
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