Avolon Q3 2025 Update Highlights Strategic Growth and Fleet Expansion
Avolon reports strong Q3 2025 results with fleet growth, new Airbus orders, and improved credit ratings amid aviation leasing recovery.
Avolon Holdings Limited, a global leader in aviation finance, delivered a robust performance in the third quarter of 2025, underscoring its strategic positioning in the rapidly recovering aviation leasing sector. The Dublin-based lessor reported significant fleet expansion, successful capital raising, and a near-complete placement rate for its orderbook over the next 24 months. These achievements come during a period of transformation and growth in the global aircraft leasing market, which is projected to reach $565.1 billion by 2034, up from $187.1 billion in 2024. Avolon’s Q3 results highlight its capacity to capitalize on sustained high lease rates and strong airline demand, despite ongoing industry-wide supply chain constraints.
The aviation leasing sector is experiencing a dynamic recovery post-pandemic, with airlines increasingly turning to asset-light models to manage fleet renewal and expansion. Avolon’s ability to navigate these market shifts, while maintaining financial discipline and strategic agility, positions it as a key player in shaping the industry’s future trajectory. This article examines Avolon’s Q3 2025 performance, strategic initiatives, and the broader context of the aviation leasing industry.
Avolon’s journey began in May 2010, founded by Dómhnal Slattery and a team from RBS Aviation Capital, with headquarters in Dublin, Ireland. The company quickly established itself as a prominent global lessor, culminating in its public listing on the New York Stock Exchange in December 2014 under the ticker AVOL. This marked a significant milestone as the largest listing of an Irish-founded company on the NYSE at that time. However, the public phase was short-lived; Bohai Leasing Co., a Chinese financial services firm, acquired Avolon in January 2016, resulting in its delisting from the NYSE.
The ownership structure further diversified in November 2018 when ORIX Corporation, a major Japanese financial institution, acquired a 30% stake from Bohai Capital. This provided Avolon with broader access to Asian and global capital markets, supporting its expansion strategy. A significant leadership transition occurred in October 2022 when Andy Cronin, the founding CFO, succeeded Dómhnal Slattery as CEO, ensuring continuity in strategic direction while introducing new perspectives.
Central to Avolon’s business philosophy are its “TRIBE” values—Transparency, Respect, Insightfulness, Bravery, and Ebullience—which guide its relationships with stakeholders and operational decisions. By focusing on a fleet of young, fuel-efficient aircraft and cultivating partnerships with 141 airlines in 62 countries, Avolon has achieved global reach and portfolio diversification, both of which are central to its resilience and growth.
Avolon’s Q3 2025 results build on a strong foundation laid in the previous year. In 2024, the company reported net income of $608 million (a 79% increase year-over-year) and record operating cash flow of $2.0 billion. The momentum continued into 2025, with Q1 net income of $145 million (up 36% year-over-year) and lease revenue of $683 million, marking the highest quarterly revenue in its history.
During Q3 2025, Avolon acquired 17 aircraft and sold 15, demonstrating an active approach to fleet management. The company ended the quarter with 60 aircraft agreed for sale, reflecting a strong pipeline for asset monetization. Such balanced portfolio management allows Avolon to optimize asset age, technology standards, and market responsiveness.
Orderbook management remains a key strength. Avolon placed 8 aircraft from its orderbook during the quarter, achieving a 99% placement rate for the next 24 months. This high placement rate underscores robust demand for Avolon’s assets and its ability to align aircraft types with airline requirements. The company also entered letters of intent for 10 additional aircraft, signaling ongoing growth opportunities. “Avolon’s 99% orderbook placement for the next 24 months highlights its strong airline relationships and market positioning.”
A major highlight of Q3 2025 was Avolon’s order for 90 new Airbus aircraft, 75 A321neo and 15 A330neo, scheduled for delivery through 2033. This move reinforces Avolon’s commitment to next-generation, fuel-efficient aircraft, aligning with industry trends toward sustainability and operational efficiency.
The A321neo, the largest member of the A320neo family, offers airlines significant range and performance improvements, including over 20% fuel savings and 50% noise reduction compared to previous generation aircraft. The A330neo, equipped with Rolls-Royce Trent 7000 engines, delivers a 7,200nm range and up to 25% reductions in fuel burn, CO2 emissions, and operating costs compared to prior models. These aircraft are also designed to accommodate sustainable aviation fuel (SAF), supporting airlines’ environmental goals.
This Airbus order brings Avolon’s total commitment to 79 A330neos and 264 A321neos, positioning it as a leading customer for these aircraft types. Industry leaders, such as Airbus EVP Benoît de Saint-Exupéry, have acknowledged Avolon’s role as a “barometer of the aircraft market,” reflecting the strategic importance of this partnership for both companies.
“This order demonstrates our strong confidence in the long-term demand for new aircraft. Our scale and balance sheet position us to support our airline customers’ expansion and replacement needs into the next decade.” — Andy Cronin, Avolon CEO
During Q3 2025, Avolon undertook significant capital structure optimization, raising $2.2 billion in unsecured funding while repaying $829 million in secured debt and executing a $1 billion tender offer. These actions increased the proportion and duration of unsecured debt, enhancing financial flexibility and potentially lowering borrowing costs.
In May 2025, Avolon’s credit profile received a boost with upgrades from both Fitch Ratings (BBB- to BBB) and Moody’s Ratings (Baa3 to Baa2), each assigning a stable outlook. These upgrades reflect institutional confidence in Avolon’s business model and financial management, positioning the company to access capital markets on more favorable terms.
According to CFO Ross O’Connor, these improvements “highlight the strength of our balance sheet and high levels of liquidity, positioning us to build on our financial success to date.” The stable outlooks from both agencies suggest that these gains are sustainable and grounded in fundamental business strength.
Avolon’s achievements must be viewed within the broader context of the global aircraft leasing industry. The market is forecast to grow at a compound annual rate of 11.8% over the next decade, driven by airlines’ preference for leasing, supply chain constraints, and the ongoing recovery in air travel demand. Lessors have benefited from supply/demand imbalances, particularly for narrow-body aircraft, resulting in sustained high lease rates.
As of Q3 2025, Avolon managed an owned, managed, and committed fleet of 1,159 aircraft, including 522 new technology aircraft. This scale places Avolon among the world’s leading lessors, competing with firms like AerCap, SMBC Aviation Capital, Air Lease Corporation, and BOC Aviation, who collectively held over 8.4% of the global market share in 2024. Industry analysis by Morningstar DBRS and others points to a stable outlook for aircraft lessors, with “financial performance healthy through the lessors’ most recent reporting period reflecting the positive industry dynamics.” The consensus is that favorable conditions will persist through 2025, with airline credit performance expected to remain strong despite some risks.
“The rental market is in a very similar position to last year pointing to sustained high lease rates in the primary and secondary space.” — SMBC Aviation Capital
Despite positive growth, the aviation leasing sector faces persistent supply chain disruptions. Recent industry reports indicate that 64% of aerospace companies are still grappling with such issues, with only minor improvements since 2024. The primary challenges include extended lead times and limited availability of raw materials, contributing to delivery delays, only 1,254 new aircraft were delivered in 2024, a 30% shortfall from projections.
The International Air Transport Association (IATA) reports that the aircraft backlog now exceeds 17,000 units, up from pre-pandemic levels of 10,000–11,000, implying wait times of up to 14 years. This supply constraint has kept lease rates elevated, benefiting lessors with existing fleets. IATA Director General Willie Walsh has criticized manufacturers for these ongoing issues, citing negative impacts on airline revenues, costs, and environmental performance.
On the other hand, Roland Berger’s 2025 aerospace supply chain resilience report notes that nearly 70% of companies feel well-prepared for production ramp-up, a significant improvement from 2024. However, financing is an emerging concern, with 49% of respondents highlighting a lack of financial resources, up from 41% the previous year. This suggests that while operational readiness is improving, financial constraints may pose challenges to sustained industry growth.
Industry experts remain cautiously optimistic about the outlook for aviation leasing. In a March 2025 interview, Avolon CEO Andy Cronin stated, “I think the industry is well set for continued recovery. The aircraft leasing industry profit margins are still down a bit actually from pre-COVID and we all have a bit of work to do to get those profit margins back up.” He also noted that access to capital remains strong, supported by a stable interest rate environment.
Key trends driving the market include airlines’ focus on fleet modernization for fuel efficiency and carbon reduction, often achieved through leasing. AE Industrial Partners highlights that “well-publicized supply chain issues have impacted the production rate of new aircraft and engines, resulting in an interesting opportunity for used aircraft. Leases are increasingly being extended while more creative approaches are being taken to manage and maximize the maintenance lifecycle of used aircraft.”
With its focus on new-generation, fuel-efficient aircraft and a geographically diverse customer base, Avolon is well-positioned to benefit from these trends. The Asia-Pacific region, in particular, is expected to see rapid growth, driven by expanding middle-class populations and low-cost carriers. Avolon’s relationships with 141 airlines across 62 countries provide a solid foundation for continued expansion.
Avolon’s Q3 2025 business update demonstrates the company’s effective execution of its strategic vision in a challenging yet opportunity-rich environment. Robust operational metrics, such as a 99% orderbook placement rate and a substantial new Airbus order, position Avolon to capitalize on sustained demand for aircraft leasing. Successful capital raising and improved credit ratings further strengthen its foundation for future growth. The broader aviation leasing market continues to evolve, shaped by supply-demand imbalances, high lease rates, and airlines’ preference for asset-light models. Avolon’s scale, fleet modernization, and global reach enable it to navigate these dynamics effectively. As the industry continues its recovery, Avolon’s strategic positioning and operational discipline suggest it is well-equipped to capture emerging opportunities and manage ongoing challenges in supply chain and financing.
What were Avolon’s key achievements in Q3 2025? How is Avolon addressing supply chain challenges? What is the outlook for the aircraft leasing industry? How does Avolon’s new Airbus order impact its strategy? What are the main risks facing the sector?
Avolon Q3 2025 Business Update: Strategic Growth Amid Aviation Industry Recovery
Company Background and Strategic Foundation
Operational and Financial Performance in Q3 2025
Strategic Fleet Expansion and Airbus Partnership
Capital Structure Optimization and Credit Ratings
Market Position and Industry Dynamics
Industry Challenges: Supply Chain and Financing
Expert Analysis and Future Outlook
Conclusion
FAQ
Avolon acquired 17 aircraft, sold 15, maintained a 99% orderbook placement rate, ordered 90 new Airbus aircraft, and raised $2.2 billion in unsecured funding.
Avolon actively manages its fleet and orderbook, leveraging its scale and relationships to navigate supply chain disruptions and maintain high placement rates.
The industry is expected to grow strongly, with a projected market size of $565.1 billion by 2034, driven by airline fleet modernization and asset-light strategies.
The order for 90 new aircraft enhances Avolon’s fleet with fuel-efficient, next-generation models, aligning with airline demand for sustainability and operational efficiency.
Persistent supply chain disruptions and financing constraints are key risks, though industry readiness for production ramp-up is improving.
Sources
Photo Credit: Avolon
Aircraft Orders & Deliveries
Qanot Sharq Receives First Airbus A321XLR in Central Asia
Qanot Sharq becomes Central Asia’s first operator of the Airbus A321XLR, expanding long-haul routes to North America and Asia from Tashkent.
This article is based on an official press release from Airbus and Qanot Sharq.
On December 19, 2025, Qanot Sharq, Uzbekistan’s first private airline, officially took delivery of its first Airbus A321XLR (Extra Long Range) aircraft. The delivery, facilitated through a lease agreement with Air Lease Corporation (ALC), marks a historic milestone for aviation in the region, as Qanot Sharq becomes the launch operator of the A321XLR in Central Asia and the Commonwealth of Independent States (CIS).
This aircraft is the first of four confirmed A321XLR units destined for the carrier. According to the official announcement, the airline intends to utilize the aircraft’s extended range to open new long-haul markets that were previously inaccessible to single-aisle jets, including planned services to North America and East Asia.
The newly delivered A321XLR is powered by CFM International LEAP-1A engines and features a two-class layout designed to balance capacity with passenger comfort on longer sectors. The aircraft accommodates a total of 190 passengers.
In addition to the seating configuration, the aircraft is fitted with Airbus’ “Airspace” cabin interior. Key features include customizable LED lighting, lower cabin altitude settings to reduce jet lag, and XL overhead bins that provide 60% more storage capacity compared to previous generation aircraft.
Nosir Abdugafarov, the owner of Qanot Sharq, emphasized the strategic importance of the delivery in a statement regarding the fleet expansion.
“The A321XLR’s exceptional range and efficiency will allow us to offer greater comfort and convenience while maintaining highly competitive operating economics.”
, Nosir Abdugafarov, Owner of Qanot Sharq
The introduction of the A321XLR allows Qanot Sharq to deploy a narrowbody aircraft on routes typically reserved for widebody jets. With a range of up to 4,700 nautical miles (8,700 km), the airline plans to connect Tashkent with destinations in Europe, Asia, and North America.
According to the airline’s strategic roadmap, the new fleet will support route expansion to Sanya (China) and Busan (South Korea). Furthermore, the airline has explicitly outlined plans to serve New York (JFK) via Budapest. While the A321XLR has impressive range, the distance between Tashkent and New York (approximately 5,500 nm) necessitates a technical stop. Budapest will serve as this intermediate point, potentially allowing the airline to tap into passenger demand between Central Europe and the United States, subject to regulatory approvals. AJ Abedin, Senior Vice President of Marketing at Air Lease Corporation, noted the geographical advantages available to the airline.
“Qanot Sharq is uniquely positioned to unlock the full potential of the A321XLR due to its strategic location in Uzbekistan, bridging Europe and Asia.”
, AJ Abedin, SVP Marketing, Air Lease Corporation
The delivery of the A321XLR signals a distinct shift in the competitive landscape of Uzbek aviation. Until now, long-haul flights from Tashkent,specifically to the United States,have been the exclusive domain of the state-owned flag carrier, Uzbekistan Airways, which utilizes Boeing 787 Dreamliners for non-stop service.
By adopting the A321XLR, Qanot Sharq appears to be pursuing a “long-haul low-cost” hybrid model. The A321XLR burns approximately 30% less fuel per seat than previous-generation aircraft, allowing the private carrier to operate long routes with significantly lower trip costs than its state-owned competitor. While the one-stop service via Budapest will result in a longer total travel time compared to Uzbekistan Airways’ direct flights, the lower operating costs could allow Qanot Sharq to offer more competitive fares, appealing to price-sensitive travelers and labor migrants.
Furthermore, the choice of Budapest as a stopover is strategic. If Qanot Sharq secures “Fifth Freedom” rights,which are currently a subject of regulatory negotiation,it could monetize the empty seats on the Budapest-New York sector, effectively competing in the transatlantic market while serving its primary base in Central Asia.
Sources: Airbus Press Release, Air Lease Corporation
Qanot Sharq Becomes First Central Asian Operator of Airbus A321XLR
Aircraft Configuration and Capabilities
Strategic Network Expansion
AirPro News Analysis: The Long-Haul Low-Cost Shift
Sources
Photo Credit: Airbus
MRO & Manufacturing
ITP Aero to Acquire Aero Norway, Expanding CFM56 MRO Services
ITP Aero signs agreement to acquire Aero Norway, enhancing aftermarket capabilities for CFM56 engines and expanding its European MRO presence.
ITP Aero, a global leader in aerospace propulsion, has signed a binding agreement to acquire Aero Norway, a specialized maintenance, repair, and overhaul (MRO) provider focused on CFM56 engines. According to the company’s official announcement, the transaction is expected to close during the first half of 2026, subject to customary regulatory approvals.
The acquisition represents a significant expansion of ITP Aero’s aftermarket capabilities. By integrating Aero Norway’s facility in Stavanger, Norway, ITP Aero aims to reinforce its status as a leading independent player in the aerospace services sector. The move follows a trajectory of aggressive growth for the Spanish propulsion company since its acquisition by Bain Capital in 22.
Aero Norway operates out of a facility at Sola Airport in Stavanger, employing a workforce of over 200 skilled technicians. The company has established a reputation for high-quality engine maintenance, specifically for the CFM56 engine family, serving a global client base of airlines, lessors, and asset managers.
In its press statement, ITP Aero highlighted that the two companies possess “highly complementary strengths.” The deal combines Aero Norway’s deep expertise in engine overhaul with ITP Aero’s existing engineering capabilities and component repair infrastructure. This synergy is designed to offer a more comprehensive suite of services to the aftermarket sector.
This agreement is the latest in a series of strategic moves by ITP Aero. In 2023, the company acquired BP Aero in the United States and was recently selected to join Pratt & Whitney’s GTF MRO network. These steps are part of a broader “2030 Strategic Plan” which aims to double the size of the business and increase the global workforce by 50% by the end of the decade.
While the press release focuses on corporate synergies, the acquisition underscores a critical trend in the current aviation landscape: the extended dominance of the CFM56 engine. As new-generation engines like the LEAP and GTF face supply chain delays and durability challenges, airlines are keeping older aircraft powered by CFM56 engines in service longer than originally planned.
Industry data suggests that approximately 20,000 CFM56 engines will remain in service through 2025. Consequently, the demand for maintenance shop visits is projected to peak between 2025 and 2027. By acquiring a specialist shop like Aero Norway, ITP Aero is effectively positioning itself to capture high-value work during this period of “structural undersupply” in the narrowbody market. This “Golden Tail”, the long, profitable tail end of an engine program’s lifecycle, provides a stable revenue runway for MRO providers capable of handling heavy overhauls. The crossover point where new-generation engine shop visits outnumber CFM56 visits is not expected until later in the decade, making capacity for legacy engines a premium asset today.
Leadership from both organizations emphasized the value of combining their respective technical strengths. Eva Azoulay, CEO of ITP Aero Group, described the agreement as a key component of the company’s roadmap.
“The signing of this binding acquisition agreement marks a significant milestone in our strategic roadmap. This acquisition reinforces our ambition to become a leading independent player in the aerospace aftermarket.”
, Eva Azoulay, CEO of ITP Aero Group
Neil Russell, CEO of Aero Norway, noted that the merger would unlock synergies beneficial to their customer base.
“By combining the complementary strengths of ITP Aero and Aero Norway, we will unlock significant synergies that enhance our competitiveness and deliver even greater value to our customers.”
, Neil Russell, CEO of Aero Norway
ITP Aero reports that it has tripled its earnings since 2022 and is currently implementing a long-term business plan that spans civil, defense, and MRO segments. The company was advised on legal M&A matters regarding this transaction by Baker McKenzie.
Pending regulatory clearance, the integration of Aero Norway into the ITP Aero Group will finalize in 2026, solidifying the company’s footprint in the European MRO market.
Sources:
ITP Aero to Acquire Aero Norway, Strengthening Position in CFM56 Aftermarket
Strategic Expansion in the MRO Sector
AirPro News Analysis: The “Golden Tail” of the CFM56
Executive Commentary
Future Outlook
Photo Credit: ITP Aero
Airlines Strategy
Kenya Airways Plans Secondary Hub in Accra with Project Kifaru
Kenya Airways advances plans for a secondary hub at Accra’s Kotoka Airport, leveraging partnerships and regional aircraft to boost intra-African connectivity.
This article summarizes reporting by AFRAA and official statements from Kenya Airways.
Kenya Airways (KQ) is moving forward with strategic plans to establish a secondary operational hub at Kotoka International Airport (ACC) in Accra, Ghana. According to reporting by the African Airlines Association (AFRAA) and recent company statements, this initiative represents a critical pillar of “Project Kifaru,” the airlines‘s three-year recovery and growth roadmap.
The proposed expansion aims to deepen intra-African connectivity by positioning Accra as a pivotal node for West African operations. Rather than launching a wholly-owned subsidiary, a model that requires heavy capital expenditure, Kenya Airways intends to utilize a partnership-driven approach, leveraging existing relationships with regional carriers to feed long-haul networks.
While the Kenyan government formally requested permission for the hub in May 2025, Kenya Airways CEO Allan Kilavuka confirmed in December 2025 that the plan remains under active study. A final decision on the full execution of the project is expected in 2026.
The core of the Accra strategy involves basing aircraft directly in West Africa to serve high-demand regional routes. According to details emerging from the planning phase, Kenya Airways intends to deploy three Embraer E190-E1 aircraft to Kotoka International Airport. These aircraft will facilitate regional connections, feeding passengers into the carrier’s long-haul network and supporting the logistics needs of the region.
This operational shift marks a departure from the traditional “hub-and-spoke” model centered exclusively on Nairobi. By establishing a presence in Ghana, KQ aims to capture traffic in a market currently dominated by competitors such as Ethiopian Airlines (via its ASKY partner in Lomé) and Air Côte d’Ivoire.
A key component of this strategy is the airline’s collaboration with Ghana-based Africa World Airlines (AWA). Kenya Airways signed a codeshare agreement with AWA in May 2022. This partnership allows KQ to connect passengers from its Nairobi-Accra service to AWA’s domestic and regional network, covering destinations like Kumasi, Takoradi, Lagos, and Abuja.
Industry observers note that this “capital-light” model reduces the financial risks associated with starting a new airline from scratch. Instead of competing directly on every thin route, KQ can rely on AWA to provide feed traffic while focusing its own metal on key trunk routes. The push for a West African hub comes as Kenya Airways navigates a complex financial recovery. The airline reported a significant milestone in the 2024 full financial year, posting an operating profit of Ksh 10.5 billion and a net profit of Ksh 5.4 billion, its first profit in 11 years. This resurgence provided the initial confidence to pursue the growth phase of Project Kifaru.
However, the first half of 2025 presented renewed challenges. The airline reported a Ksh 12.2 billion loss for the period, attributed largely to currency volatility and the grounding of its Boeing 787 fleet due to global spare parts shortages. These financial realities underscore the necessity of the proposed low-capital expansion model in Accra.
The strategy focuses on collaboration with existing African carriers rather than creating a new airline from scratch.
, Summary of Kenya Airways’ strategic approach
The viability of the Accra hub relies heavily on the Single African Air Transport Market (SAATM) and “Fifth Freedom” rights, which allow an airline to fly between two foreign countries. West Africa has been a leader in implementing these protocols, making Accra a legally feasible location for a secondary hub.
Furthermore, the African Continental Free Trade Area (AfCFTA) secretariat is headquartered in Accra. Kenya Airways is positioning itself to support the trade bloc by facilitating the movement of people and cargo between East and West Africa. The airline has already introduced Boeing 737-800 freighters to serve key destinations including Lagos, Dakar, Freetown, and Monrovia.
The decision to delay a final “go/no-go” confirmation until 2026 suggests a prudent approach by Kenya Airways management. While the West African market is lucrative, it is also saturated with aggressive competitors like Air Peace and the well-entrenched ASKY/Ethiopian Airlines alliance. By opting for a partnership model with Africa World Airlines rather than a full subsidiary, KQ avoids the “cash burn” trap that led to the collapse of previous pan-African airline ventures. If successful, this could serve as a blueprint for other mid-sized African carriers looking to expand without overleveraging their balance sheets.
What aircraft will be based in Accra? When will the hub become operational? How does this affect the Nairobi hub?
Kenya Airways Advances Plans for Secondary Hub in Accra Under ‘Project Kifaru’
Operational Strategy: The ‘Mini-Hub’ Model
Partnership with Africa World Airlines
Financial Context and ‘Project Kifaru’
Regulatory Landscape and Competition
AirPro News Analysis
Frequently Asked Questions
Current plans indicate that Kenya Airways intends to base three Embraer E190-E1 aircraft at Kotoka International Airport.
While planning is underway and government requests have been filed, a final decision on full execution is not expected until 2026.
Nairobi (Jomo Kenyatta International Airport) remains the primary hub. The Accra facility is designed as a secondary node to improve regional connectivity and feed traffic back into the global network.
Sources
Photo Credit: Embraer – E190
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