Sky-high rentals have hit the aircraft market as Boeing jets top $300,000 a month.

Passengers aren’t the only ones paying more for flights this year.

Aircraft shortages are pushing up the prices airlines pay for plane rentals as demand for travel returns.

The rent for the new Boeing 737 Max rose more than 20% between April 2020 and July this year to $316,000 per month, aviation consulting firm IBA Group estimates. The rival Airbus A320neo has climbed to $324,000 per month, up more than 14% from April 2020 and the highest price since before the Covid pandemic. The larger version, the A321neo, cost $375,000 a month in July.

The world’s largest leasing companies, such as Air Lease, Avolon and AerCap, which acquired GE’s leasing business last year, are reaping the benefits.

More than 51% of the world’s nearly 23,000 single- and twin-body airliners are owned or operated by leasing companies, according to aviation consulting firm Cirium. While many airlines own their own aircraft, some carriers choose to lease or combine aircraft instead.

The reasons for leasing are varied and include a low credit score, which increases the cost of borrowing, and a desire or need to save money rather than shell out for new aircraft that can cost over $100 million apiece at list prices.

The higher costs are due to the fact that airlines are already facing high inflation, which results in costs that are usually included in fares. Aircraft rentals are approaching, and in some cases even surpassing, 2019 prices, and are likely to be even higher. Rising oil prices this year are making new fuel-efficient aircraft more attractive than old ones, and higher interest rates could also drive up rental rates.

“You have rising interest rates and a higher cost of capital,” said Mike Yeomans, director of valuation and consulting at the IBA. “That will push rental rates higher for the rest of the year.”

Leasing executives told CNBC that many of their clients are renewing leases and new planes are hard to come by.

Steven Udvar-Hazy, Los Angeles-based executive chairman of Air Lease, said the company’s lease renewal rate is approaching an all-time 90% rate and that it is typically between 65% and 75%.

“We are seeing a large number of lease renewals for aircraft that we planned to sell a year ago,” Udvar-Hazy said. This means the company doesn’t have to worry about switching costs and it gives the landlord a steady stream of income.

This trend is the result of a resurgence in airline bookings while Boeing and Airbus, which are still recovering from a lull in demand and production in the early days of the pandemic, as well as supply chain issues, are unable to ramp up production as much as they would like. . .

According to the latest data available from the International Air Transport Association, in June global passenger traffic was up 76% year-over-year, but still down about 29% from pre-pandemic levels.

Hazey said interest rates would need to rise higher and remain high to significantly reduce travel demand.

For now, airlines are “looking at a world where they can actually operate more aircraft,” said Andy Cronin, Dublin-based appointed CEO of Avolon. “We are definitely seeing a shortage of aircraft and an acceleration in demand beyond what we expected at this stage.”

Cronin said lease rates for Boeing Maxes and Airbus A320neos have risen by 10-15% this year.

Supply chain problems and labor shortages are preventing manufacturers from increasing production. Part of the problem stems from sanctions against Russia, which cut titanium supplies after that country invaded Ukraine in February.

Raytheon CEO Greg Hayes acknowledged last month that some customers will feel the impact of the supply shortfall. “Now we are not talking about dozens and dozens of aircraft, but about five to ten aircraft … which will be without engines, because we do not have the titanium forgings that we expected to receive this year. Hayes said during an earnings call last month, referring to the engine of the Pratt & Whitney conglomerate.

“We’ll work it out, but it won’t be without some pain for our clients.”