Operating lessor AWAS sees a better leasing environment for the Airbus A320 and other narrowbody aircraft compared with a year ago.
Speaking on a second quarter earnings call, Ray Sisson, president and chief executive officer of AWAS, said the lessor, which has 18 A320 family aircraft left to place through November 2015, is experiencing "strong growing demand" for its pipeline aircraft, and "yields are improving".
"It is a significantly better position than where we were 12 months ago," he says. "The trends are improving."
Sisson notes a narrower gap in placement times.
"In the last year, we were always playing catch-up and we went beyond a 12-month window," he says. "But I don't think that will be the case going into this fall."
He says demand for "every asset class", or large and small narrowbody aircraft, is "stronger" than it was 12 months ago.
"There is still a bias towards larger narrowbodies, but there's plenty of demand for example for [Airbus] A319s and [Boeing] 737-700s, the yields are better than they were last year," he says, adding: " I'm not saying the yields are good, but it's certainly a lot better position than we were 12 months ago."
Regarding rising interest rates, Sisson says there "tends to be a six- to eight-month lag" between the rise in interest rates and the increase in lease rentals and "we're already starting to see that rents and yields are moving up across our fleet."
However, he notes not all of this movement is related to interest rates. "I think the supply and demand balance is getting better," he says, adding: "But certainly, the rise in interest rates will have a knock on effect on lease rentals."