Just until recently wet leasing was considered a way to solve short term problems like seasonal volumes, maintenance checks, groundings, etc. Lately, though, long-term wet leasing from third parties has grown considerably in Europe.
Aviation’s ACMI global market revenue is projected to reach over USD 7.07 B by 2025, the ACMI business model has become a mighty contender in the aviation world. How did that happen?
ACMI (aircraft, crew, maintenance, and insurance) or the “wet lease” of an aircraft saw a significant amount of growth over the last few years, partially due to the ever-increasing demand of air travelers along with substantial growth in the number of airports paired with major airlines ready to receive new aircraft.
Boeing 737 MAX grounding also had a huge impact on the growing popularity of wet leasing as airlines had sold tickets for flights that were no longer allowed to take off.
ACMI companies focus on customer satisfaction. They provide both scheduled and charter airlines with speed and flexibility in capacity management, i.e. overcoming seasonality, rapid growth, crew shortage, much faster entrance to the new markets and routes, backlog and late aircraft delivery.
ACMI companies are very adaptive to the needs of scheduled and charter airlines by providing customizable solutions, including livery, cabin layout, staff configuration, and many more small yet important details that lead to customer satisfaction. So it comes as no surprise that ACMI model found itself a perfect place on the global aviation scene.
The ACMI providers are thriving in Europe by providing solutions to top tier scheduled and charter airlines. For example, Thomas Cook airlines and SunExpress, “wet lease” up to 14.3% and 19.8% of their fleet respectively in summer 2019 (Source www.ch-aviation.com).
Leaders in ACMI business have found a sustainable business opportunities in partnerships with local companies in untapped regions has allowed them to take advantage of growth opportunities as well improve and diversify their portfolios while achieving economies of scale.
The rapid growth of urbanization and disposable incomes around the world mean that these pairings have the potential to provide long term profits and benefits to all parties involved.
According to ASG calculations, airline could save up to 850K EUR (NET). These numbers are based on 2400 flying hours when both, it’s own aircraft and ACMI are used. The calculations include these operational costs: aircraft lease and fixed reserves (12 months), variable reserves, 6 crew seats (12 months), insurance, administration, software costs, training for the crew.
The commercial jet segment has found and seized its opportunity by embracing the ACMI model. By creating a ready supply of options for passengers, this segment has moved itself to the forefront of the lucrative and competitive aviation market.