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Ishka Vista: 2025 Aviation Finance Market Forecast

On the surface there is a sense of ‘déjà vu’ about 2025, relative to 2024. Many of the ingredients are the same. The outlook is bright, passenger demand has returned to pre-pandemic levels and trading is on the increase. But dig a little deeper and there are some subtle differences in the approach of investors, lessors, financiers, airlines and the OEMs. After all, we are now entering the second half of a decade that had promised so much but delivered little of it (although there are mitigating circumstances for that). There has been an urgency to catch up, and while this is ongoing, attention in some areas now seems to be switching to plan and prepare strategically in time for the next wave, cycle, a change in direction, and even fortune.

For the industry, 2024 delivered a more stable foundation on the back of continued traffic growth, an overall positive airline performance (albeit relatively weaker year-on-year) and the deployment of assets whose productive days were once thought over. The undersupply of new aircraft remains the prevailing issue that will continue into 2025 and beyond.

2025 has the hallmarks of retaining that bedrock from which the second half of this decade will evolve – aviation is still re-learning how to manage inflation, higher interest rates, and escalation. Other traditional factors such as revenues and yields, aircraft deliveries and retirements, airline and lessor competition, and developments in financing and investor appetites, will add colour to an airline industry whose revenues continue to edge towards $1,000 billion (maybe this is the year) and $100 billion in new aircraft deliveries (OEMs would love it to be this year).

It would be remiss not to recognise the potential stumbling blocks this year, which we cover in more detail in this report. We will at least start on a positive note and trust that our Ishka Vista will provide you with food for thought.