Aircraft leasing companies expected to hike rental, adding to cost pressures for airlines

AIR carriers should expect the cost of jet leases to rise amid higher air travel demand, interest rate hikes and geopolitical tensions - adding to pressure on their margins when they are only just emerging from the pandemic.

While air carriers are ramping up supply to fulfil pent-up travel demand as border restrictions relax, they are constrained by a shortage of resources - including planes - that were cut during the pandemic.

DBS equity analysts wrote in a report that airlines are still focused on lowering their debt - racked up to tide themselves over the pandemic - and they therefore have a lower headroom for capital spending.