Leasing aircraft has become an integral part of airlines’ business strategies, helping to boost temporary capacity and alleviate financial burdens associated with purchasing planes. Aircraft leasing costs are not merely operational expenses but also vital indicators of an airline’s competitiveness and financial health.
According to collected data, Vietnam Airlines (HOSE: HVN) spent over 10,000 billion VND to lease 39 aircraft in 2016. This expense gradually increased alongside the number of leased planes, peaking at 15,300 billion VND for 61 aircraft in 2020 – the year the COVID-19 pandemic first struck. During this year, aircraft leasing costs accounted for 38% of the national carrier’s production and business expenses.
Vietnam Airlines’ Aircraft Leasing Costs
![]() Source: Author’s compilation
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After weathering the pandemic and facing financial challenges, Vietnam’s lotus-branded airline had to cut costs and restructure the corporation. The number of leased planes and associated expenses decreased to the 11,000-12,000 billion VND range.
Notably, the data from the past two years also reflects increasing leasing costs. With the same number of leased planes (52), the cost rose from 11,300 billion VND to 12,200 billion VND.
For the low-cost carrier Vietjet (HOSE: VJC), they initially only recorded aircraft purchase costs and started recognizing leasing expenses from 2021. This expense soared from 4,000 billion VND in 2021 to over 11,000 billion VND.
Severe aircraft shortage, sky-high leasing rates
If Vietnamese airlines maintain the same number of leased planes as in 2023, they may face higher leasing costs this year.
According to a report by the Vietnam Aviation Authority, the engine leasing price for the Airbus A321 has doubled compared to 2019. The leasing rate for the Boeing B-787 was 160,000 USD/month in 2022 and has now surged to 370,000 USD/month. Spare parts and materials costs have increased by 10-13% compared to pre-2019 levels.
Moreover, leasing rates may continue to climb as Vietnam faces a severe aircraft shortage while travel demand rebounds robustly in the post-pandemic era.
As per the Vietnam Aviation Authority’s report, as of May 2, the total number of aircraft operated by domestic airlines stood at 199, a decrease of 32 planes compared to 2023. The number of planes actually in operation ranges from 165 to 170, a reduction of 40 to 45 aircraft compared to last year’s average.
The primary reason for this decline in the number of aircraft is the recall of Pratt&Whitney (PW) engines to undergo thorough inspections and repairs to address manufacturing defects. This is estimated to impact 600-700 PW1100 engines in service worldwide. In Vietnam, these engines are used in some A321NEO aircraft operated by Vietnam Airlines and VietJet Air. The recall has led to the temporary grounding of several planes during 2024-2025. Additionally, the time required for engine repairs has lengthened. PW now estimates a 140-160 day turnaround, up from 75 days in 2019, with some cases taking up to 365 days.
The airlines’ plans to acquire new aircraft this year have also been affected. Vietjet Air will not receive any additional planes, and Vietnam Airlines will only add two Boeing 787s in June and July. Pacific Airlines currently operates no aircraft, and Bamboo Airways has reduced its fleet to five planes, down 25 from last year.
Some domestic airlines have even reported being unable to find planes to lease as per their plans.