This article is based on an official press release from CDB Aviation.

CDB Aviation Secures $500 Million in Oversubscribed Note Issuance

CDB Aviation, a wholly owned Irish subsidiary of China Development Bank Financial Leasing Co., Ltd., has successfully priced a US$500 million issuance of senior unsecured notes. According to the company’s official announcement released on February 5, 2026, the notes carry a fixed coupon rate of 4.25% and are set to mature in February 2031.

The issuance, conducted through its subsidiary CDBL FUNDING 1, attracted significant attention from the global investment community. The order book peaked at over US$2.36 billion, representing an oversubscription rate of approximately 4.7 times. This robust demand allowed the lessor to tighten pricing significantly, landing at a spread of 50 basis points over the 5-year US Treasury rate (T5 + 50bps), a 45 basis point improvement from the Initial Price Guidance.

This transaction highlights the continued appetite among international investments for high-grade aviation assets. The notes were issued under Regulation S, targeting investors outside the United States, and hold strong investment-grade ratings of A2 from Moody’s, A from S&P Global, and A+ from Fitch.

Strategic Capital Structure and Executive Commentary

The proceeds from this issuance are earmarked for general corporate purposes, including the optimization of the lessor’s capital structure and the enhancement of its competitive position in the global market. As of early 2026, CDB Aviation manages a fleet of over 520 owned and committed aircraft, serving approximately 85 Airlines customers across more than 40 jurisdictions.

In a statement regarding the successful pricing, the company’s leadership emphasized the strategic importance of this return to the international bond market.

“This marks another resounding success following CDB Aviation’s return to the international bond market in 2025. The issuance reflects our ongoing efforts to optimize our capital structure and enhance our competitiveness, underscoring the CDB Aviation team’s unwavering commitment to our long‑term vision.”

— Jie Chen, Chief Executive Officer, CDB Aviation

The transaction was supported by a syndicate of Joint Bookrunners, including Standard Chartered Bank, China CITIC Bank International, HSBC, Goldman Sachs (Asia) L.L.C., Bank of Communications, and China Securities International.

Market Context and Comparative Performance

AirPro News Analysis

The pricing of CDB Aviation’s latest notes offers a revealing glimpse into the current state of aviation finance in early 2026. When analyzed against verified market data, the 4.25% coupon for a 5-year term appears highly competitive, particularly when compared to industry peers.

For instance, data from January 2026 shows that industry leader AerCap priced a 3-year note at 4.125%. CDB Aviation achieved a nearly identical rate (4.25%) for a longer 5-year tenor. Typically, longer maturities command higher premiums; the fact that CDB Aviation secured such tight pricing suggests investors view its credit, backed by the “quasi-sovereign” status of the China Development Bank, as exceptionally stable.

Broader Industry Trends

This issuance occurs against a backdrop of a “favorable” outlook for aviation lessors, as characterized by agencies such as Morningstar DBRS. A persistent shortage of new aircraft, driven by production delays at major OEMs, has sustained high lease rates and aircraft values. This environment benefits lessors with established fleets who are now refinancing debt to fund future growth.

With approximately $19.3 billion in lessor debt maturing in 2026, capital markets activity is expected to remain high. The 4.7x oversubscription for CDB’s bond mirrors a wider trend where global investors are seeking stable yield generators amidst stabilizing global interest rates.

Sources:

• CDB Aviation Official Press Release
• AerCap Press Release (Jan 6, 2026)
• Morningstar DBRS 2026 Global Aircraft Leasing Outlook

This article is based on an official press release from the International Air Transport Association (IATA).

IATA 2025 Report: Record Load Factors Mask $11 Billion Supply-Chain Crisis

The global aviation industry returned to historical growth patterns in 2025, posting a 5.3% increase in total traffic compared to the previous year. According to data released by the International Air Transport Association (IATA), the year was characterized by robust passenger demand and record-breaking efficiency, yet severely hampered by a persistent supply chain crisis that cost Airlines an estimated $11 billion.

While the post-pandemic surge has normalized, the industry faces a new set of challenges. IATA reports that the Passenger Load Factor (PLF), a measure of how full planes are, reached an all-time high of 83.6%. This record reflects a dual reality: strong consumer desire to travel and a forced constraint on capacity due to delivery delays of new Commercial-Aircraft and engines.

IATA Director General Willie Walsh emphasized that while demand remains resilient, the inability to expand fleets has created significant operational and financial headwinds. “2025 saw demand for air travel grow by 5.3%,” Walsh noted in the press release. “This returns industry growth to align with historical growth patterns after the robust post-COVID rebound.”

The $11 Billion Supply Chain “Headache”

The defining narrative of 2025 was not just passenger growth, but the struggle to service it. IATA identified supply chain failures as the industry’s most critical challenge, estimating the financial impact at over $11 billion for the year. Airlines were forced to fly older, less efficient aircraft and pay premiums for short-term solutions.

According to IATA’s breakdown, the costs of these delays were distributed across several key areas:

• Excess Fuel: $4.2 billion (due to operating older, less fuel-efficient fleets).
• Maintenance: $3.1 billion (keeping aging aircraft in service longer than planned).
• Engine Leasing: $2.6 billion (shortages forced expensive lease agreements).
• Inventory: $1.4 billion (stockpiling spare parts to mitigate delays).

“The supply chain challenges were the biggest headache for airlines in 2025. People clearly wanted to travel more, but airlines were continually disappointed with unreliable delivery schedules… and resultant cost increases that are estimated to exceed $11 billion.”

— Willie Walsh, IATA Director General

Walsh expressed hope that 2025 would represent the “nadir” of these issues, with a rebound in deliveries expected in 2026. He stressed that every new aircraft Delivery contributes to a “quieter, cleaner fleet,” aligning with both airline efficiency goals and customer expectations.

Regional Performance: Africa Leads, North-America Lags

The IATA report highlights a significant divergence in regional performance. While global traffic rose by 5.3%, regional growth rates varied dramatically, driven by local economic conditions and connectivity improvements.

Africa and Asia-Pacific Surge

Africa emerged as the top performer for growth, with traffic rising 9.4% year-over-year. The region also achieved a record load factor of 74.9%, an increase of 0.9 percentage points, though it remains the lowest globally. Asia-Pacific followed closely with a 7.8% increase in traffic, driven by a massive 10.9% jump in international demand as travel in the region continued to normalize.

North America and the US Contraction

In stark contrast, North America recorded the slowest growth of any region at just 0.4%. IATA data reveals that the US domestic market actually contracted by 0.6%. Despite this stagnation, North American carriers maintained a high load factor of 83.9%, suggesting that capacity management remained tight even as demand softened.

AirPro News Analysis: The US Market Signal

The contraction in the US domestic market is a critical signal within the IATA data. While a 0.6% decline may seem minor, it stands out against the backdrop of global growth. We believe this contraction likely stems from a combination of economic cooling and high ticket prices resulting from the very capacity shortages IATA describes. When airlines cannot add seats, prices inevitably rise, potentially pricing out price-sensitive domestic leisure travelers. Furthermore, the disparity between the US domestic contraction and the strong international growth suggests a shift in consumer preference toward long-haul travel over domestic trips.

Capacity Constraints and the “New Normal”

The record global Passenger Load Factor of 83.6% (+0.1 ppt from 2024) indicates that airlines are utilizing their existing assets to the absolute limit. Total capacity (measured in Available Seat Kilometers, or ASK) grew by 5.2%, slightly lagging behind the 5.3% growth in demand. This tight margin left little room for error in operations.

Other regions showed steady performance:

• Latin America: Traffic grew approximately 8.6%, bolstered by strong domestic markets like Brazil (+11.1%).
• Middle East: Traffic rose 6.7%, with a load factor of 81.6%.
• Europe: Traffic increased 5.3%, perfectly aligning with the global average, while maintaining high load factors around 84%.

Decarbonization and Policy Challenges

Beyond operational metrics, IATA raised concerns regarding the industry’s transition to net-zero. The report describes current EU targets for Sustainable Aviation Fuel (SAF) adoption, specifically the goal of 20% by 2035, as “not achievable” under current production levels. IATA is calling on governments to shift focus from penalizing airlines to providing fiscal incentives for energy producers to scale up SAF production.

AirPro News Analysis: Efficiency vs. Necessity

The record load factor of 83.6% is often celebrated as a metric of efficiency, but in the context of 2025, it appears to be a metric of necessity. Airlines did not simply choose to fill planes to this level; the supply chain crisis left them with no other option. While high load factors improve unit economics, they also reduce operational resilience. When flights are 100% full, re-accommodating passengers during disruptions becomes mathematically impossible, leading to the compounding delays travelers experienced throughout the year.

FAQ: IATA 2025 Market Analysis

What was the global passenger growth rate in 2025?

Global passenger traffic (RPK) grew by 5.3% compared to 2024.

How much did supply chain delays cost airlines?

IATA estimates the total cost of supply chain issues, including excess fuel, maintenance, and leasing, exceeded $11 billion in 2025.

Which region saw the highest growth?

Africa led all regions with a 9.4% increase in passenger traffic.

Why did the US domestic market shrink?

The US domestic market contracted by 0.6%. While IATA cites this as a drag on North American performance, it likely reflects capacity constraints and shifting consumer preferences toward international travel.

Sources: International Air Transport Association (IATA)

This article is based on an official press release from Arthur J. Gallagher & Co. and additional market data.

Gallagher Finalizes Integration of AssuredPartners Aviation, Creating Global Risk Powerhouse

Arthur J. Gallagher & Co. (Gallagher) has officially completed the integration of the AssuredPartners aviation and aerospace team into its global practice, a move that significantly reshapes the competitive landscape of aviation insurance. Announced on January 6, 2026, this consolidation follows Gallagher’s $13.45 billion acquisitions of AssuredPartners, which was finalized in August 2025.

According to the company’s announcement, the combined division now employs nearly 600 risk professionals worldwide. The integration is designed to merge Gallagher’s historical strength in large, complex aerospace risks with AssuredPartners’ extensive footprint in the U.S. general aviation sector. The result is a unified entity capable of servicing the entire spectrum of aviation clients, from private pilots and flying clubs to major commercial airlines and aerospace manufacturers.

Leadership Appointments and Organizational Structure

To manage the expanded portfolio, Gallagher has implemented a new leadership structure that leverages talent from both organizations. The integration creates a dedicated U.S. team comprising 190 colleagues across 10 locations.

Key leadership changes include:

• Eric Barfield: The former head of AssuredPartners’ aerospace practice has been appointed President of the combined U.S. General Aviation team.
• Steve Lloyd: Lloyd continues in his role as CEO of Gallagher’s U.S. Aviation division, maintaining a focus on large and complex risk accounts.
• Peter Elson: As the Global CEO of Aviation and Aerospace at Gallagher, Elson retains top-level oversight, with both Barfield and Lloyd reporting directly to him.
• Tyler LaMantia: Previously leading Gallagher’s U.S. general aviation team, LaMantia will transition to a new role heading Gallagher’s operations in San Diego.

In a statement regarding the merger of talent, Peter Elson, Global CEO of Aviation & Aerospace at Gallagher, emphasized the scale of the new operation:

“We are delighted to bring together the AssuredPartners team with our existing Gallagher aerospace colleagues to create a powerhouse of specialists with unrivalled sector capability. Both teams are market-leading in their own right and this combined team is the largest and strongest group of aviation and aerospace risk professionals anywhere in the world.”

Strategic Synergies and Market Impact

The integration is positioned as a strategic alignment of complementary strengths rather than a simple absorption of assets. AssuredPartners has long been recognized for its dominance in the General Aviation (GA) mid-market, serving a high volume of relationship-driven clients. Conversely, Gallagher has established itself as a leader in the complex risk market, handling major cargo operations and commercial carriers.

By consolidating these portfolios, Gallagher aims to offer existing AssuredPartners clients access to broader global resources, including advanced data analytics and claims advocacy. Simultaneously, the unified underwriting strategy is expected to leverage global market relationships to secure more favorable terms for clients across all sectors.

AirPro News Analysis: Navigating a Hard Market

The timing of this integration is critical. The aviation insurance sector is currently navigating a “hard market” characterized by rising premiums and stricter underwriting criteria. These conditions are driven by several factors, including geopolitical tensions, escalating repair costs, and “social inflation”, the trend of rising litigation costs and jury awards.

By scaling its operations to nearly 600 professionals, Gallagher is positioning itself to better navigate these headwinds. A larger, consolidated entity has more leverage when negotiating with underwriters, potentially shielding clients from the most severe market fluctuations. Furthermore, this move narrows the gap between Gallagher and its primary global competitors, Marsh and Aon, specifically within the specialized aviation niche.

The acquisition of AssuredPartners, valued at $13.45 billion, stands as the largest acquisition of a U.S. insurance broker by a strategic acquirer in history. J. Patrick Gallagher, Jr., Chairman & CEO, noted the cultural fit at the time of the acquisition:

“AssuredPartners’ entrepreneurial spirit, broad U.S. footprint and middle-market focus make them an ideal merger partner for Gallagher.”

With the integration now official, the focus will likely shift to operational execution, particularly in niche sectors such as agricultural aviation and emerging urban air mobility technologies, where the combined expertise of the two firms can be most effectively deployed.

Sources

• Arthur J. Gallagher & Co.