The slide on Airbus A320 family monthly lease rates has stopped and rentals are now stabilising, says AerCap's chief executive officer.
"We don't see further deterioration in the lease rates on the A320 family," said Aengus Kelly on a second quarter earnings call.
"What we're seeing at the moment is that demand for those aircraft [the A320 family] and the lease rates are firming. We don't see them declining further from where they are."
Kelly says AerCap has been able to "rapidly redeploy" any A320 family aircraft that "were coming off lease on a scheduled basis, or ones that were unscheduled, such as the Kingfisher" assets. "All of those aircraft were placed in the first half of the year," he says.
Kelly believes a "combination of factors" has led to increased market demand for A320 family aircraft.
"There is, obviously, price stimulation in the fact that lease rates have fallen, but importantly, you also have to look at the worldwide portfolio," says Kelly. "About 20% of the fleet is over 20 years of age. Those are deeply inefficient aircraft."
Kelly explains there is "always a price" where a fuel-efficient aircraft can get placed at the expense of a fuel-inefficient unit. .
"So, that's why, if you have a portfolio that's focused on modern technology, fuel-efficient aircraft, there'll always be a price that you'll move these airplanes at."