Aviation Finance

Aviation Finance Vol. 16 No 22, October29th 2026. ISSN 2009-7859

Leasing Market

Fitch sees negatives outweighing positives in 2027 for aircraft leasing sector

The accumulation of macroeconomic and geopolitical hurdles facing the aircraft leasing sector has prompted global ratings agency Fitch to downgrade its outlook for the sector from ‘Neutral’ to ‘Deteriorating’ for 2027. This reflects ‘macroeconomic headwinds, elevated fuel prices, geopolitical risks’ and the risk of weaker airlines but it expects aircraft lessors’ credit profiles to prove resilient thanks to strong aircraft demand, disciplined leverage and solid funding access and liquidity.

Leasing Business

AerCap Q3 adjusted net income surpassed $1 billion

AerCap has raised its full year guidance following another strong quarter for the lessor as it reported adjusted net income for Q3 2026 of $1,009 million and a gain on sale margin of 45% during the period. It also said it expects to sell over $5 billion worth of aviation assets in 2026. The lessor also revealed that it's share repurchase activity so far in 2026 has seen it repurchase around 10% of its shares outstanding at the beginning of the year. Looking at the aviation market CEO Aengus Kelly said if jet fuel prices remain elevated he expects airlines to move 'to strengthen liquidity and protect their balance sheets' but that 'this type of backdrop can create opportunities for AerCap.'

Leasing Business

Aviation Capital Group boosts backlog with record order

Aviation Capital group has become the latest lessor to add sizably to its aircraft backlog with the California-based lessor agreeing its largest ever aircraft order with Airbus to 75 A320neos. The deal extends its delivery pipeline into the mid-2030s and ACG CEO Thomas Baker described the deal as 'a statement of confidence' in the future of air travel and ACG's growing role in the leasing sector.

  
In this issue

In this issue

The accumulation of risks facing the aviation sector will see a worsening environment for lessors in 2027 according to the latest research from Fitch, featured in this issue, although it expects global lessors to remain resilient despite these headwinds thanks to 'sound asset quality, disciplined leverage, stable funding access and solid liquidity. AerCap's self-described 'fortress balance sheet' supports Fitch's views on lessor strength. In our Perspectives Column IBA Aviation's Stuart Hatcher gives his insights into a market he describes as split between weak operators and strong assets while we look at ACG's record aircraft order and FTAI latest ABS issuance.

Perspectives

Strong assets, strained airlines: the aviation leasing market in late 2026

The aircraft leasing market is currently characterised by weak operators and very strong asset prices writes IBA’s Stuart Hatcher. On the leasing side the largest players now dominate the leased fleet and order backlog and with data showing a softening of narrowbody lease rates and forecasts of record trading volumes for 2026 Hatcher says historical lessor behaviour suggests ‘the best-informed owners see the cycle turning.

Leasing Business

FTAI returns to market with its second ABS issuance

FTAI, who recently completed the deployment of its first mid-life aircraft leasing SPV, the Strategic Capital Initiative (FTAI SCI 1) fund and launched its second Strategic Capital fund, has now launched its second aircraft ABS transaction - MRE 2026-2. It follows on from the engine MRO specialist's debut aircraft ABS issuance in May this year. It marks the latest financing milestone for the aviation company as it continues to grow its aviation asset management arm, which it says now makes up more than half of its leasing activity, to complement its core 'maintenance, repair and exchange' business model focussed on current technology narrowbody jet engines.