Amid the recovery of the aviation market after the challenges of the COVID-19 pandemic, an interesting development is emerging in the area of wet lease airlines. German Airways, a specialist in flight services and part of the Zeitfracht Group, plans to buy back its E190 aircraft from leasing contracts.
This decision marks a strategic shift and reflects growing confidence in the recovery of travel. By announcing the early termination of contracts with US Lessor Azorra, German Airways aims to modernise its fleet and benefit from the potential financial advantages of owning its own aircraft fleet.
The wet lease market is on the rise
The wet lease market, in which airlines rent aircraft together with crews from other airlines, is currently experiencing a boom. After the drastic losses during the pandemic, many airlines, including well-known companies such as KLM, Luxair and ITA, are looking for flexible solutions to meet the increasing demand. Wet lease contracts enable airlines to respond quickly to seasonal peaks in demand without having to invest in expensive capacities of their own.
German Airways' decision to buy back its E190 fleet is part of a comprehensive strategy aimed at modernizing the fleet in the long term. Wolfram Simon-Schröter, Managing Director of Zeitfracht, emphasized the advantages of the buyback: "We will buy our aircraft out of the leasing contracts. This gives us the opportunity to use the E190 for longer and to bring depreciation potential into the balance sheet."
Strategic decisions and investments
Zeitfracht, the parent company of German Airways, has established itself as an active player in the aviation sector in recent years. During the pandemic, the company took over Rostock-Laage Airport and invested in the insolvent fashion chain Adler. In addition, the airlines WDL and LGW were integrated into German Airways to strengthen its market position. This proactive approach has paid off, especially in a stabilizing wet lease market.
With the decision to buy back the E190 fleet, German Airways is optimistic about the market development. The aircraft are on average 17 years old, which means that significant investment is needed to modernize them. Simon-Schröter explained that the airline wants to work closely with Azorra in the future to not only optimize the existing aircraft, but also to open up new opportunities in the European business.
Lufthansa and the wet lease boom
The entire industry is showing signs of recovery, and Lufthansa is also increasingly relying on wet lease models. Airlines CEO Jens Ritter announced that Lufthansa will increasingly rely on external partners from 2025 onwards to meet seasonal peaks in demand. According to Ritter, Lufthansa needs around 25 more aircraft in summer than in winter. This shows the need for flexible solutions in an industry characterized by uncertainty and fluctuating demand.
Against this backdrop, Lufthansa recently extended a wet lease agreement with Air Baltic to take up to 2025 A21-220s and their flight crew from 300. In addition, the company is said to be interested in taking an equity stake in Air Baltic, which underlines Lufthansa's strategy to diversify in a competitive market.
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