The structural imbalance between global aircraft supply and demand will likely persist through the end of this decade, according to BOC Aviation Ltd. Chief Executive Officer Steven Townend.
The shortage is in the thousands of aircraft and stems from years of delayed deliveries, Townend said in a Bloomberg TV interview. While narrowbody supply may rebalance by decade’s end given focused efforts by Airbus SE and Boeing Co., widebody deliveries remain below 2018 levels and with no rapid ramp up in sight the shortfall for that segment could run for much longer, he said.
The global aviation market has had a challenging year as surging jet fuel prices caused by the Middle East conflict see expenses balloon for some major airlines. In recent weeks, British Airways owner IAG SA and Lufthansa have given up on growth plans for this year, while Air France-KLM trimmed its 2026 capacity outlook. In contrast, Cathay Pacific Airways Ltd. reaffirmed a 10% growth target.
The ability of carriers to pass those costs on to consumers has varied by region.
North American airlines have been able to push through higher fares without demand erosion, while European airlines benefited from better hedging, according to Townend. Parts of Asia — particularly China, where high-speed rail offers passengers a ready alternative — face a more difficult pricing environment, he said. Townend noted Southeast Asian carriers in particular face increased difficulties.
Those pressures have seen airlines increasingly turning to lessors for liquidity. That includes financing a greater share of new deliveries, exploring sale-leaseback arrangements on unencumbered aircraft, or seeking funding for pre-delivery payments, Townend added.
