In a LinkedIn post, Embraer President & CEO John Slattery called on lessors and airlines to right-size their fleet strategies, saying lessors have been building market share at “seemingly any cost”.

Slattery said increasing competition has become a major concern for lessors as new entrants with access to lower cost of funds drive down lease rate factors.

The CEO pointed to the sale-leaseback environment as evidence of this trend, saying lessors have been building market share at “seemingly any cost” and “the race to the bottom” in purchasing deals has resulted in lease rate factors under 0.6.

“Whether there is something to brag about in the upcoming years will depend upon how seriously the airline industry responds to the threats,” Slatterly said in the post. “The need to right-size with aircraft able to weather any cycles in demand and supply becomes all the more imperative.”