- Latest edition January 8th: Outlook
- Latest edition December 11th: Year in Review
- Latest edition November 27th: Solid business in Dubai
- Latest edition November 13th: Headwinds and tailwinds
- Latest edition October 30th: Quarterly reports show strength of market
- Latest edition October 16th: ABS issuance has a strong start to Q4
Leasing Business The leasing view on the aviation finance industry
The Aviation Complex Early year moves signal optimism for 2026In 2025 global lessors were in a 'sweet spot' amongst the global aviation complex as demand continued to outstrip supply of aircraft - boosting lease rates, renewals and supporting aircraft trading. The latest operational figures from AerCap for the final quarter of 2025 indicate an equally strong finish to the year, with the lessor taking advantage of the momentum to make an early year move in the bond market. Looking at the broader picture, recent aircraft orders, as well as strengthening delivery performance from Airbus and Boeing, indicate a positive outlook across the sector, despite uncertainties created by rising geopolitical tensions. Aviation Financing Aviation finance continued to attract diverse sources of capital in 2025Aircraft and aviation finance has been successful in attracting new sources of capital in the past decade as global institutional investors, pension funds, sovereign wealth funds, asset managers and private equity firms have all invested heavily in the sector enticed by the attractive risk-adjusted returns aviation assets can offer. 2025 saw this trend continue with a number of joint ventures, a well trodden path by asset managers taking their first steps in the sector, and specialist aviation funds closing during the year. Aviation ABS issuance was also a bright spot as investors snapped up over $10 billion in aviation asset backed securities during the year. |
In this issue In this issueReviewing the market in 2025 Avolon's chief risk officer Jim Morrison gives his insights on the lessor's experience of the financing and investment environment and how this could develop in the coming quarters. We also analyse the increasing levels of investment in the aviation and aircraft leasing sector and the change in competitive market dynamics that 2025 leasing M&A activity could bring in 2026. Goodbody's Joe Gill, writing in our Perspectives column, offers a review and outlook for the aviation sector and offers up his predictions for the year ahead. Perspectives Growing demand for travel and tight supply of new aircraft to drive aviation finance market in 2026
Leasing Strategy How the 2025 drive for scale changes the leasing landscape
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Avolon's Chief Risk Officer Jim Morrison gives his insights on the major trends in the aviation finance sector in 2025 including the financing environment, the 2025 leasing market, global investor interest, aircraft trading and supply/demand dynamics, lease rate trends and his assessment of the risk landscape for the global aviation industry in 2026. 'Overall, it is a very positive trend that we are seeing capital from a diverse range of sources attracted to the sector. It highlights how investors are increasingly attracted to leasing's investment characteristics, which are similar to infrastructure: stable long-term cashflows backed by hard assets that are resilient to inflation.'
With the global fleet of commercial jets on track to reach 33,000 aircraft by 2030 additional resources will be needed across the aviation industry, from airports, MRO providers, airlines as well as aircraft lessors and financiers, writes Joe Gill. Looking ahead at 2026 growing demand for air travel will continue to underpin the strong market dynamics and robust trading in many segments of the aviation sector, not least amongst aircraft leasing companies who are benefiting from record high lease rates and high demand for their aircraft he says.
The announced take-private of US-based and NYSE-listed Air Lease Corporation (ALC) was the standout leasing consolidation move in 2025 with the move, announced in September 2025, recently rubberstamped by ALC's shareholders. When the deal closes, expected in the first half of 2026, SMBC Aviation Capital will become the second 1,000+ aircraft portfolio lessor. The other significant moves saw Avolon, another lessor that looks set to join the 1,000+ club, close its acquisition of Castlelake Aviation Limited early in 2025 while Dubai Aerospace Enterprise brought its portfolio to 650 aircraft when it closed the acquisition of NAC in May.