With more than half of the global airline fleet leased, Saudi-based AviLease aims to become one of the top 10 aircraft lessors. Eleni Giokos speaks with AviLease CEO Edward O’Byrne about the company’s rapid growth since its establishment in 2022

A significant portion of the global commercial airline fleet is leased rather than owned, as airlines look to manage passenger demand and reduce upfront costs. According to the International Air Transport Association, over half of all commercial aircraft are leased, with companies like Avilease rapidly expanding their fleets to meet industry needs.

Leasing offers airlines flexibility and financial resilience, especially during periods of economic uncertainty or crisis, such as the COVID-19 pandemic. Growth in passenger traffic remains strong in regions like Saudi Arabia, while some markets, such as the United States, show signs of slowing due to inflation. The aircraft leasing industry continues to attract investment, with companies seeking to consolidate and expand their operations globally.

Airlines lease planes to meet demand, keep costs down

Now, let's talk about a rental market that's flying high. You may rent a house, lease a car or large appliances as well as furniture. But did you know that commercial airlines can rent airplanes? And they do in a big number. According to industry experts and the latest numbers available from the International Air Transport Association, more than half of the global fleet is leased rather than owned. And airlines rent planes for many of the same reasons that you and I might rent a big ticket item, to meet passenger demand with low upfront costs and less debt. I spoke with the CEO of Avilease, an aircraft leasing company headquartered in Saudi Arabia and owned by the kingdom's public investment fund. I began by asking Edward O'Byrne about his company's footprints and what's led to the rapid growth it has seen since its establishment in 2022. In less than three years, we built a fleet of 200 aircraft, 50 airline customers globally, 30 countries. So it's a true business. We're top 17 in the business and we're aiming to become top 10 in the industry, which basically entails doubling the balance sheet of the company. You work with 48 airlines around the world. Give me a sense of the airlines that you work with right now and also to those that say you've grown really fast. Is that a concern? It's a great question. Largest positions are in the KSA. Today we have 20% of our fleet in the KSA. Saudi Agroop, FlyNAS, maybe soon the upcoming carrier Riyad Air. Internationally named like Southwest, American Airlines, Air France in India, Indigo. So you name it, right? Many of the big carriers, our portfolio is actually a very strong quality book. Talk to me about demand globally and where you see potential for slowdown, potential for growth. So if you look at the first six months of the year of 2025, basically passenger traffic has grown 5.7%. And Saudi Arabia actually grew 7%. So it's a very strong country. There are pockets of high demand. I think where we're starting to see areas of weakness is in the U.S. Because of inflation? Well, so traffic in June has only grew 2.3% and low-cost carriers who are basically exposed to the more price-sensitive segment of the market have been hit the hardest. So we're starting to see, I think, areas of weakness due to potential inflation. I don't want to take anything away from the rest of the growth. We expect to call it 5% for the rest of the year. But there are areas of weakness which we need to watch. There was an area of weakness here in the Middle East for a period of time around the Israel-Iran conflict. That's gone away and now traffic is back to very sustainable levels. Are you worried about a prolonged increase in oil prices and the impact on oil? Or do you think most of that has been priced in? On the positive side, oil is priced in and airlines, so long as oil is relatively stable, can live with that. Oil has been quite stable in the $60 range. Your portfolio, the value is $7.2 billion right now. It's Saudi-backed by the PIF. Why is Saudi Arabia getting into this business? For several reasons. It's a very attractive business. It's very profitable. Typically, we deliver double-digit profits for our shareholders today, after only three years. It's a 17-19% net income business on average across the industry. So we're almost there ourselves as a lease. It's very resilient. We've seen that through COVID. You've got about 60 airlines that went bankrupt during COVID. One leasing company went bankrupt during COVID. So very resilient to crisis. And then for Saudi Arabia, which obviously is going through a huge transformation, economic and otherwise, it's a way to help consolidate the ecosystem. So there's a lot of growth in Saudi Arabia today. There are north of 400 aircraft that have been ordered by the local airlines to grow their own fleets. That represents about $40 billion of CapEx financing requirements between now and the end of the decade. Those airlines need our financing, but frankly, it way exceeds our capabilities. So what I call my night job is to be able to attract capital to the space, whether from Saudi, also internationally, through first debt. We just obtained two ratings from Moody's and from Fitch. We're also now trying to attract equity coming from China. We have a Chinese partner, joint venture partner, where we have 25 aircraft with them. We will announce soon a second transaction like that, similar joint venture, co-invest vehicles. And our goal is to help consolidate the ecosystem in Saudi Arabia by bringing that capital into the kingdom rather than the capital coming out of the kingdom to invest elsewhere.

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