DUBLIN, March 8, 2024 /CNW/ — As we move into 2024, Gediminas Ziemelis, chairman of Avia Solutions Group and a leading figure in ACMI leasing, outlines three major trends shaping the aviation industry, particularly ACMI leasing. With demand for air travel recovering, with forecasts close to pre-pandemic levels, the aviation sector is poised for growth. However, this optimism is tempered by persistent structural challenges, including labor shortages, financial constraints and supply chain disruptions, all of which ACMI leasing can strategically address.
Trend 1: Wet Leasing as a Strategic Response to Demand Surge
The end of historically low borrowing costs means an era of challenges for airlines, especially those still struggling with the financial fallout from the COVID-19 pandemic. With interest rates stabilizing but still high, traditional fleet expansion through borrowing is becoming a risky venture amid uncertain long-term demand. ACMI leasing is emerging as a vital solution offering flexibility and financial viability. It allows airlines to scale their operations to meet current demand without the burden of long-term debt, ensuring adaptability regardless of future market fluctuations.
Trend 2: Addressing labor shortages through ACMI
The aviation industry is facing a severe human resources crisis, exacerbated by the pandemic’s impact on pilot training programs and high attrition rates. With the expected requirement to train an additional 264,000 pilots by 2029 to fill the retiring workforce, airlines are under enormous pressure. ACMI leasing offers respite by attracting an international pool of aviation professionals, thereby mitigating staffing challenges and enabling airlines to maintain operational efficiency and growth.
Trend 3: Overcoming seasonality and supply-side issues
ACMI’s historic strength in managing seasonality is now more relevant than ever, with airlines using wet leasing to adjust capacity in response to fluctuating demand. Additionally, as the industry deals with supply-side shocks such as production delays and parts shortages, ACMI provides a critical brake, ensuring service continuity. This flexibility is also being recognized by governments and tourism-dependent regions seeking to rejuvenate travel and tourism post-pandemic by rapidly expanding routes and adapting capacity.
Conclusion: ACMI’s strategic imperative for airline sustainability
Ziemelis advocates a balanced approach to fleet management, recommending that 6-15% of an airline’s fleet should include ACMI-leased aircraft. This strategy offers the necessary operational flexibility while reducing financial risk, positioning airlines to take advantage of current opportunities and deal with future uncertainties. With a fleet prepared for both short-term and long-term leasing, Avia Solutions Group is ready to support airlines in overcoming current challenges, maximizing resurgent demand and securing a prosperous future in the evolving aviation landscape.
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SOURCE Avia Solutions Group
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