Travel tops other spending for consumers post-Covid, according to Aengus Kelly, chief executive of the world’s biggest aircraft leasing business.
Mr Kelly runs Dublin-based AerCap, which supplies jets, helicopters and engines to airlines and other customers around the globe.
Asked whether a recession could hinder aviation’s recovery from continuing this year, he said people had amassed enough products during the pandemic, and had shifted their focus.
“People are prioritising travel over other expenditure,” he said. “They have enough Peleton bikes, widescreen TVs and Xboxes.”
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Mr Kelly was speaking at the annual AirFinance Journal conference in the National Convention Centre, Dublin, on Tuesday, where he told the audience that demand for aircraft from airlines remained strong, despite the prospects of a recession.
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He criticised manufacturers Boeing and Airbus for ongoing delays in delivering aircraft pledged to airlines.
“They are not excusable at all,” said Mr Kelly, adding that manufacturers had been wildly optimistic in the promises they made to their customers.
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He pointed out there was little point in manufacturers delivering aircraft to customers once the summer had passed.
“Airlines make most of their money in 120 days and spend the rest of the year trying not to lose too much of it,” he said.
Mr Kelly explained that airlines have sold seats on aircraft by the time the manufacturers tell them delivery will be delayed.
He also argued that hitting air travel’s net zero carbon target by 2050 promised to be a lot more complex than politicians believed.
The aircraft leasing chief calculated that it would cost $30 billion a year over 30 years to get there.
He pointed out that producing sustainable aviation fuel presented big practical challenges.
Mr Kelly argued that the factories making it needed to be built close to airports, and getting planning permission for this could be difficult. However, he agreed that the targets were achievable.
Andy Cronin, chief executive of rival Avolon, also Irish-based and the second biggest player in the industry, told the audience “jurisdictional risk” posed a new challenge as a consequence of the Russia-Ukraine war.
Avolon, AerCap and others are suing their insurers to recover the cost of aircraft held by Russian airlines following the conflict’s outbreak 11 months ago.
Mr Cronin pointed out that aircraft lessors had remained stable through the pandemic and during the fallout from the Ukraine war.
He predicted that it would take a couple of years for these businesses to begin generating the same returns on equity investment as they had done before Covid-19 curbs grounded air travel in 2020.
