Does fleet ownership matter? Linking leasing decisions to airline financial performance

Purpose The airline industry is capital-intensive and highly sensitive to demand cycles and financing conditions. A central strategic choice is the fleet financing mix, specifically the extent to which aircraft are owned rather than leased. This study examines whether the proportion of owned aircraft (POWNED) is associated with airline profitability measures reported after the adoption of ASC 842, while controlling for operational scale, fleet characteristics and macroeconomic conditions. Design/methodology/approach We use an unbalanced quarterly panel of 14 U.S. airlines covering 2019 to 2023. We estimate panel models relating fleet ownership share (POWNED) to three profitability outcomes, operating profit (OPROF), earnings before tax (EBT), and net income (NI). The specifications control for airline size, traffic activity, fleet composition, business model indicators, and macroeconomic conditions, and use panel specifications and robustness checks to account for unobserved heterogeneity. Findings Higher fleet ownership share (POWNED) is positively associated with operating profit (OPROF). In contrast, results are weaker and less consistent for profitability measures that incorporate financing and tax components, specifically EBT and NI. Overall, the findings suggest that the relationship between ownership structure and reported performance depends on the profitability measure and the operating and macroeconomic environment. Research limitations/implications The sample period includes pandemic and post pandemic disruptions that may influence both fleet decisions and financial outcomes. The study focuses on US airlines under ASC 842, which supports comparability but may limit generalizability to other jurisdictions and accounting regimes. Practical implications For managers, investors and analysts, the results indicate that fleet financing choices may be reflected differently across profitability measures. A higher ownership share is associated with operating profit in the main models, but the relationship is weaker for EBT and net income and is not statistically significant in asset-scaled robustness tests. Performance evaluation should therefore align the profitability measure with the decision context, distinguishing operating performance from financing, tax, and other below-the-line effects. Originality/value This study provides post-ASC 842 evidence on the association between aircraft ownership share (POWNED) and airline profitability across multiple reported performance measures. It shows that the ownership-profitability relationship is strongest for operating profit and weaker for measures that incorporate financing, tax, and other non-operating effects, particularly when profitability is evaluated using asset-scaled robustness tests.