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By Eleni Maragkou, Valuations Analyst, Cirium Ascend Consultancy

The ACMI (Aircraft Crew Maintenance Insurance) market continued to show strong demand in Europe last year, with more than 130 wet-leases recorded in Cirium’s database during Q4 2023 involving passenger jets. Passenger demand remains strong, with latest IATA data indicating traffic grew more than 20% in February over 2023, which Ascend estimates to be more than 4% growth over February 2019.

The number of wet-lease transactions in Europe reached a new peak in 2023, with almost 700 transactions involving 368 different aircraft, with an average lease duration of two months.

Many aircraft were contracted for up to six months, covering the period of peak demand around the summer season, especially by leisure orientated airlines.

The chart below shows that in Q1 2024, there has already been 150 wet-lease transactions to European carriers.

While both traffic and aircraft utilisation continue to increase, the supply of new aircraft remains constrained due to the supply chain issues affecting production rate by OEMs, as well as the well-known issues with the Max and GTF.

To meet the growing demand in summer 2024, Fly2Sky Airlines has secured an ACMI contract for two Airbus A320s, registered LZ-MDI and LZ-FSD, from SkyUp Airlines Malta. Leading European ACMI operators include SmartLynx Malta with 27 aircraft and SmartLynx Latvia with 21 aircraft. Those two airlines are part of the Avia Solutions Group of airlines. CityJet will operate five CRJ1000s for Lufthansa, indicative that regional aircraft are also active in the European market. UK-based ACMI start-up carrier Ascend Airways, part of Avia Solutions Group, has received its air operators’ certificate from the Civil Aviation Authority (CAA) and has acquired its first 737 Max-8 in Q1 2024. A further new ACMI provider, Fly4 Airlines, which is 49% owned by TUI and 51% by Poland’s Enter Air, is launching services with leased, former TUI, Boeing 737-800s this summer.

Cirium Fleets Analyzer data shows that the mid-life jet trading market is active, increasingly global and with a diverse set of airline customers.

The chart below shows the fleet where the operator is an airline ACMI, ranging from youngest of 5 years (737 Max) to oldest 35 years (BAe 146) with a preference of 16-17-year-old A320s and 737s. These are the most popular aircraft for ACMI operations with 115 aircraft in service, proving that mid-life to older aircraft are still important assets flying.

ACMI leasing in Europe looks set for another good year in 2024, given the current and continuing supply-side constraints. ACMI leasing offers great flexibility, especially for the peak travel seasons in which we will see it play a vital role.

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