Airline Economics magazine - Issue 81

CHALLENGES STIMULATE INNOVATION

As we approach the close of 2024, the aviation industry continues to battle challenges posed by the post-pandemic world. With persistent supply chain issues aggravated by industrial action, aircraft remain in steep demand, which is impacting the broader aviation financing and leasing sphere. And yet despite years of challenges, there have been remarkable developments across various fronts—rejuvenated financing mechanisms, strategic portfolio shifts, industry accolades, sustainability drives, and the introduction of disruptive aircraft technologies that promise to shape the future of air travel.

In this edition of Airline Economics, we open with a focus on the revival of the aviation asset-backed securitisation (ABS) market. After a prolonged period of uncertainty, the market is showing signs of stability, with eight ABS deals closed so far this year. In our feature article, A window of opportunity, we examine the recent transactions, the strategic timing of these deals, and what this resurgence might indicate for the future of aircraft lessor financing. This window presents not only a recovery for asset-backed financing but also a signal that confidence is gradually returning to this once-struggling sector.

Castlelake, a prominent player in the aircraft leasing market, has undergone significant changes this year, further signalling a shift in strategy. In the article, Pursuit of perfection, we explore Castlelake’s strategic decision to divest a large new aircraft portfolio to Avolon while also embracing a renewed focus on midlife aircraft leasing. This evolution underscores how companies are adjusting to market realities and positioning themselves for sustainable growth. Through interviews and in-depth analysis, we delve into the mechanics of this portfolio sale and its broader implications for the leasing industry.

Recognition is crucial in highlighting industry achievements, and we are proud to once again celebrate the best in European aviation through our 14th annual Aviation 100 European Awards. We honour the companies and transactions that have set the benchmark for excellence in 2024. These awards reflect the continued strength and resilience of aviation across the continent, despite ongoing global challenges.

Sustainability has been a key theme for the industry, and this year we continue to spotlight the champions of this cause in our third annual Airline Economics Sustainability Awards. Held at London’s historic Guildhall, the event brought together thought leaders, innovators, and pioneers committed to making aviation greener. In Celebrating aviation sustainability, we highlight the companies and individuals who are forging ahead with sustainable initiatives and technologies, working towards an environmentally sound future for our industry.

However, growth brings its own set of challenges. Global air travel has surpassed pre-pandemic levels, exacerbating the long-standing issue of airport congestion. In Solving airport congestion, we explore the pressing need for infrastructure expansion to accommodate the ever-increasing number of passengers, alongside innovative solutions that might alleviate this bottleneck.

Finally, we turn our attention to the operational side of airlines, with features examining both fleet management and the introduction of new aircraft types. Dual Source Fleet Challenges feature investigates the rising trend of airlines diversifying their fleets due to supply chain disruptions and aircraft availability issues. Meanwhile, The network disruptor explores the introduction of the A321XLR, an aircraft designed to revolutionise airline networks by flying longer distances on less fuel. This technology could reshape the future of long-haul, low-cost air travel and will be watched closely by operators and investors alike.

As we look toward the future, Airline Economics remains committed to bringing you the latest insights, trends, and analysis from across the aviation sector. With innovation, sustainability, and resilience driving the industry forward, there is much to anticipate in 2025 and beyond.