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
Airlines Strategy
Lufthansa Group and Air India Sign Joint Business Agreement in 2026
Lufthansa Group and Air India sign a Joint Business Agreement to improve connectivity and unify operations following the India-EU Free Trade Deal.
This article is based on an official press release from the Lufthansa Group.
On February 17, 2026, the Lufthansa Group and Air India formally signed a Memorandum of Understanding (MoU) to establish a comprehensive Joint Business Agreement (JBA). The agreement, signed by Lufthansa Group CEO Carsten Spohr and Air India CEO Campbell Wilson, signals a major shift in the India-Europe aviation market. This strategic deepening of ties between the two Star Alliance partners aims to integrate their commercial operations, moving beyond traditional codesharing to offer a unified travel experience.
According to the official announcement, the partnership is explicitly designed to capitalize on the economic momentum generated by the India-EU Free Trade Agreement (FTA), which was finalized in January 2026. By aligning their networks, the carriers intend to improve connectivity between India and the Lufthansa Group’s primary markets in Germany, Austria, Switzerland, Belgium, and Italy.
The proposed JBA covers a wide array of carriers under both parent companies. On the Indian side, the agreement includes Air India and its low-cost subsidiary, Air India Express. The European contingent comprises Lufthansa, SWISS, Austrian Airlines, Brussels Airlines, and ITA Airways.
Under the terms of the MoU, the airlines plan to coordinate flight schedules to minimize connection times and implement joint sales, marketing, and pricing strategies on key routes. The goal is to create a “metal-neutral” environment where passengers can book a single ticket across multiple carriers with consistent service standards.
“The partners aim to offer more connected and consistent experiences on a single ticket,” the Lufthansa Group stated in the press release regarding the operational goals of the agreement.
The timing of this agreement is closely linked to the ratification of the India-EU Free Trade Agreement earlier this year. Industry data indicates that the FTA has established the world’s largest free trade area, covering a bilateral goods trade volume of approximately €180 billion annually. The elimination of tariffs on aerospace parts and the expected surge in business travel have created a favorable environment for expanding capacity.
According to market reports, India is currently the fastest-growing aviation market globally and has become the second most important long-haul market for the Lufthansa Group, trailing only the United States. The partnership builds on a history of cooperation dating back to 2004, which accelerated significantly after Air India joined the Star Alliance in 2014.
While the press release highlights economic cooperation, AirPro News analyzes this move as a direct strategic counterweight to the “Middle East 3” (ME3) carriers, Emirates, Qatar Airways, and Etihad. For decades, these Gulf carriers have captured a significant majority of traffic on the India-Europe corridor by routing passengers through hubs in Dubai, Doha, and Abu Dhabi. By forming a Joint Business Agreement, Lufthansa and Air India can effectively operate as a single entity. This allows them to optimize departure times, scheduling one morning flight and one evening flight rather than competing for the same slot, thereby offering a compelling direct alternative to the stopover models of Gulf competitors. With the India-Europe corridor seeing over 10 million annual passengers, reclaiming market share from third-country hubs is a primary commercial imperative.
A critical component of the JBA’s success relies on aligning the passenger experience, an area where Air India has historically lagged behind its European partners. However, under Tata Group ownership, Air India has aggressively modernized its fleet.
Recent developments cited in industry reports include:
While the MoU marks a significant milestone, the implementation of a Joint Business Agreement is subject to rigorous regulatory review. The airlines must secure anti-trust immunity and clearance from key bodies, including the Competition Commission of India (CCI) and the European Commission. Regulators typically scrutinize such agreements to ensure they do not create monopolies on specific non-stop routes, such as Frankfurt-Delhi.
What is a Joint Business Agreement (JBA)? When will the new joint operations begin? Does this affect frequent flyer programs?
Lufthansa Group and Air India Sign MoU for Joint Business Agreement Following EU-India Free Trade Deal
Scope of the Partnership
Strategic Context: The Free Trade Catalyst
AirPro News Analysis: Countering Gulf Dominance
Fleet Modernization and Product Alignment
Regulatory Outlook
Frequently Asked Questions
A JBA is a commercial arrangement where airlines coordinate schedules, pricing, and revenue sharing, effectively operating as a single entity on specific routes.
While the MoU was signed on February 17, 2026, full implementation depends on regulatory approvals from Indian and European authorities.
Both airlines are already members of the Star Alliance, allowing for reciprocal earning and redemption. The JBA is expected to further enhance loyalty benefits and availability.
Sources
Photo Credit: Lufthansa Group
Aircraft Orders & Deliveries
BOC Aviation Renews $3.5B Credit Facility with Bank of China to 2031
BOC Aviation extends its $3.5 billion revolving credit facility with Bank of China to 2031, securing liquidity for aircraft investments and growth.
This article is based on an official press release from BOC Aviation.
BOC Aviation Limited has officially announced the renewal of its US$3.5 billion unsecured revolving credit facility (RCF) with its majority shareholder, the Bank of China. Confirmed on February 16, 2026, the transaction extends the maturity of the facility to February 13, 2031, providing the Singapore-based lessor with a five-year horizon of secured liquidity.
The renewal maintains the facility’s total value at the same level established during its 2020 expansion. According to the company, this move is designed to bolster financial flexibility and ensure consistent access to capital for aircraft investments, regardless of broader market cycles. The agreement underscores the continued financial backing BOC Aviation receives from its parent company, a critical differentiator in the competitive aircraft leasing sector.
The renewed agreement is an unsecured revolving credit facility, a structure that allows BOC Aviation to draw down, repay, and re-borrow funds as needed up to the US$3.5 billion limit. By extending the maturity date to 2031, the lessor secures a long-term funding runway to support its growth strategy.
Steven Townend, Chief Executive Officer and Managing Director of BOC Aviation, emphasized the strategic importance of this renewal in a statement released by the company. He highlighted the alignment between the lessor and its parent organization.
“This RCF extension reflects the confidence that Bank of China has in the future of our business and underscores the depth of our relationship with our major shareholder. The facility strengthens our financial flexibility and ensures our access to ample liquidity to support our aircraft investments across the cycle.”
, Steven Townend, CEO of BOC Aviation
The credit facility has grown significantly alongside BOC Aviation’s fleet over the last two decades. The company provided a timeline of the facility’s evolution, illustrating the increasing scale of support from the Bank of China:
This liquidity event occurs against a backdrop of significant operational activity for the lessor. As of December 31, 2025, BOC Aviation reported a total portfolio of 815 aircraft and engines, including owned, managed, and ordered assets. The company’s reach extends to 87 airlines across 46 countries and regions.
Data released regarding the full year 2025 indicates robust activity, with the company taking delivery of 51 new aircraft and executing a record 333 transactions. These transactions included 160 aircraft purchase commitments, signaling an aggressive growth posture that necessitates substantial available capital. In addition to the RCF renewal, BOC Aviation has recently moved to diversify its funding sources. In early February 2026, the company successfully priced US$500 million in senior unsecured notes. The combination of these notes and the renewed RCF provides a multi-layered capital structure to fund future acquisitions.
The renewal of this facility highlights a structural advantage for BOC Aviation compared to independent lessors. In a high-interest-rate environment or during periods of market volatility, the cost of funds is a primary determinant of a lessor’s profitability. The direct backing of a major state-owned bank allows BOC Aviation to secure large-scale liquidity that might be more expensive or difficult to arrange for competitors without similar parentage.
Furthermore, with supply chain constraints continuing to affect Airbus and Boeing deliveries in 2026, lessors with ready cash are better positioned to execute sale-and-leaseback (SLB) transactions with airlines desperate for liquidity. By locking in US$3.5 billion in revolving credit through 2031, BOC Aviation is effectively positioning itself to act as a liquidity provider to the airline industry, potentially acquiring assets at attractive valuations while manufacturers struggle to meet delivery targets.
BOC Aviation Secures US$3.5 Billion Facility Renewal with Bank of China
Transaction Details and Management Commentary
Historical Evolution of the Facility
Operational Context and Financial Position
AirPro News Analysis
Sources
Photo Credit: BOC Aviation
Regulations & Safety
FAA Mandates Merit-Based Pilot Hiring in New Operations Specification
The FAA issues a mandatory directive requiring U.S. airlines to adopt merit-based pilot hiring and end race or gender-based recruitment programs.
This article is based on an official press release from the FAA.
U.S. Transportation Secretary Sean P. Duffy has announced a significant shift in federal aviation policy, directing the Federal Aviation Administration (FAA) to issue a new mandatory “Operations Specification” (OpSpec) for all commercial airlines. The directive requires carriers to formally commit to merit-based hiring practices for pilots and certify the termination of recruitment programs based on race or gender.
The announcement, released through the FAA newsroom, frames the initiative as a measure to “purge DEI from our skies” and restore a focus on technical qualifications. According to the Department of Transportation (DOT), the move aligns with President Trump’s Executive Order on Ending Illegal Discrimination and Restoring Merit-Based Opportunity.
This policy marks a sharp departure from the previous administration’s approach, with Secretary Duffy explicitly criticizing prior directives as “absurd” and emphasizing that safety must remain the sole priority in aviation recruitment.
Under the new FAA directive, all U.S. commercial carriers must adopt the updated OpSpec, which legally obligates them to certify that their pilot hiring processes are exclusively merit-based. The FAA stated that failure to comply with this certification could subject airlines to federal investigation.
In the official release, Secretary Duffy emphasized the administration’s stance that demographic factors should play no role in the cockpit.
“When families board their aircraft, they should fly with confidence knowing the pilot behind the controls is the best of the best. The American people don’t care what their pilot looks like or their gender, they just care that they are most qualified man or woman for the job.”
, U.S. Transportation Secretary Sean P. Duffy
The FAA has indicated that the new OpSpec is a “commonsense measure” designed to increase transparency between passengers and airlines. While the agency acknowledged that it has already raised performance standards and dismantled internal Diversity, Equity, and Inclusion (DEI) offices, the new mandate extends these requirements directly to private carriers. FAA Administrator Bryan Bedford supported the Secretary’s position, stating that the agency’s primary focus remains the safety of the traveling public.
“It is a bare minimum expectation for airlines to hire the most qualified individual when making someone responsible for hundreds of lives at a time. Someone’s race, sex, or creed, has nothing to do with their ability to fly and land aircraft safely.”
, FAA Administrator Bryan Bedford
The directive is part of a broader effort by the DOT to roll back policies established during the Biden-Buttigieg era. The press release explicitly mentioned the reversal of directives that “wasted time renaming cockpits to flight decks,” signaling a return to traditional aviation terminology and a rejection of language changes viewed by the current administration as ideological.
According to the FAA statement, the agency is acting on “allegations of airlines hiring based on race and sex,” though specific carriers were not named in the release. The mandate aims to ensure that technical knowledge, cognitive skills, and piloting experience are the only metrics used in hiring decisions.
This new OpSpec represents a significant regulatory pivot for the U.S. aviation industry. By formalizing “merit-based” hiring into a mandatory Operations Specification, the FAA is moving the issue from political rhetoric to regulatory enforcement. Airlines, which operate under strict FAA certification rules, will likely need to review their internal HR policies to ensure they can sign the required certification without legal exposure.
While major U.S. airlines have historically maintained that safety is their top priority, many had also publicly embraced diversity initiatives in recent years to broaden their pilot pipelines. The new directive may force a restructuring of these programs to avoid the threat of federal investigation. It remains to be seen how the FAA will define “merit” in a legal context if an airline’s hiring practices are challenged, or how this mandate will interact with existing equal opportunity employment laws.
What is an Operations Specification (OpSpec)? Does this ban diversity in hiring? What happens if an airline does not comply?
Transportation Secretary Duffy Announces Mandate for Merit-Based Pilot Hiring, Targets DEI Initiatives
New “Operations Specification” Mandate
Enforcement and Compliance
Shift in Federal Aviation Policy
AirPro News analysis
Frequently Asked Questions
An OpSpec is a legal document issued by the FAA to an airline that outlines the specific authorizations, limitations, and procedures under which the airline must operate. It is legally binding.
The directive requires hiring to be “exclusively merit-based” and demands certification that race or sex-based hiring practices are terminated. It frames DEI initiatives as contrary to merit-based principles.
According to the press release, failure to certify compliance with the new mandate will subject the airline to a federal investigation.
Sources
Photo Credit: Pilot Headquarters
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