The Capital Cycle Podcast Aircraft Leasing Lift-Off
Mar 31, 2026
Tom Wharram, a North American equities analyst at Marathon specializing in aircraft leasing and aviation-sector capital-cycle analysis. He walks through why production remains below peak and how supply-chain and labor issues limit output. He explains rising passenger demand and the shift to newer, fuel-efficient planes. He traces leasing history, consolidation, opportunistic pandemic buys, and why lease rates and returns may recover over years.
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Persistent Aircraft Production Shortfall
- Aircraft production remains well below its 2018 peak, creating a structural shortfall in new planes.
- Production fell sharply from 2018 to 2020 and by 2025 was still ~15% below peak, with forecasts not to surpass 2018 until ~2027–2030.
Low Rates Fuelled A Surge In New Lessors
- Low rates after the GFC attracted many new lessors, doubling the number of firms with sizable fleets pre‑pandemic.
- In 2010, 80% of lease fleet was held by 21 lessors; by the pandemic eve it was 38, showing increased competition during low‑rate era.
Rate Mismatch Crushed Net Lease Yields After Pandemic
- Post‑pandemic, low contracted lease rates plus rising funding costs squeezed net lease yields and ROE down to ~7%.
- Leases signed at low pandemic rates stayed on books while debt costs rose, halving ROE from pre‑pandemic ~13% levels.
