KBRA said in a new report that tariffs could potentially have impact on the aviation asset backed securitisation (ABS) market.
The report, published on May 20, 2025, said trade tensions surrounding US tariffs and reciprocal policies have “introduced new uncertainties” in the aviation sector.
“While certain tariff increases have been temporarily paused for 90 days, the broader landscape remains dynamic, with possible implications for aircraft lessors, airlines, and aviation ABS,” KBRA said.
This comes despite the aviation ABS market starting strong this year, with $2.5bn issued in the first quarter and $1.2bn in the second.
KBRA said the aviation leasing market's reliance on triple-net leases — meaning the responsibility of maintenance, insurance, and associated taxes such as tariffs falls on the airline — the lessor will be limited to direct exposure to these policies. However, the report noted that lessors may be impacted by indirect effects such as shifting aircraft demand, airline operating costs, and geographic leasing trends. These impacts “could influence asset values and aviation ABS transaction performance”.
The report can be accessed here.