A tidal wave of excess widebodies has reduced ownership costs to historic lows. Prices will only go lower as lessors finally initiate distressed-asset sales, and lease rates will continue to fall as used widebody inventory grows.
A confluence of factors, topped by the availability of lower-cost used widebodies, could increase the cost advantage of low-cost carriers over legacy competitors – at the same time reduced business travel and lower yields reduce the gap between legacy and LCC unit revenue.
Widebody availability is set to increase steadily throughout the decade.
What airplanes are likely to be most attractive?
Sustainably lower costs could enable low-cost carriers to overcome a shrunken “revenue gap.”