Aviation ABS issuances jump 85% in volume to US$9.9BN in 2025

IBA, the leading aviation intelligence and advisory company, reports that aviation asset-backed security transactions (ABS) activity has rebounded sharply in 2025, rising from US $5.38 billion across 10 deals in 2024, to US $9.95 billion across 15 deals in 2025. This represents an 85% increase in issuance volume, marking the strongest year since the 17-deal peak in 2019.

Insights shared during IBA’s recent webinar with KPMG Ireland’s Aviation Finance team highlight a market supported by strong trading conditions.

Lessor-to-lessor trades have exceeded 1100 by the end of October, 2025, the highest since 2019, and are approaching the record set in 2017. With more anticipated M&A activity, this trend is set to increase further in 2026.

Aircraft retirements remain at historic lows, lease extensions are at record highs, and aircraft availability lacks capacity demand, which are all signs of the tight global supply environment.

A key driver behind the surge is the continued fall in yields, with senior A tranche yields decreasing from an average of 6% in 2023 to 5% in 2025. Lower yields have enabled issuers to bring more affordable transactions to market, supporting the year-on-year acceleration in ABS volumes.

Data from the IBA Insight platform shows that mid-life narrowbody aircraft remain central to 2025 ABS issuances, supported by high lease rates, confidence in residual values and market demand for the aircraft types. New aircraft production and delivery rates are gradually improving. Airbus is on target, and Boeing is recovering, with Boeing set to deliver close to 600 commercial aircraft in 2025, a significant increase from the 348 delivered in 2024. Yet, industry orders continue to run above delivery rates, keeping the book-to-bill ratio above 1.5.

Investor demand has also strengthened, particularly for senior tranches, while deals such as the GGAM 2025-1 Y-Note signalling a rising appetite for higher-yielding aviation debt.

Issuers are also introducing new structural flexibility, including the ability to add assets or raise additional debt within existing programmes - a trend emerging as the sector faces a US$700bn financing requirement to 2030 when IBA forecasts over 2,300 aircraft to be delivered.

Across the broader market, portfolio rotation remains active, with disposals recorded across the first three quarters of 2025, well above the typical 5% baseline for those lessors selling more post M&A, such as DAE and Avolon.

With issuance volumes rising, supply remaining tight, and lease rates holding firm, the data indicates that aviation ABS activity is set to remain robust as the industry moves into 2026.