New Vinson & Elkins Report Provides 2025 Outlook for Aviation Finance Trends

Drawing on deep industry knowledge and experience, Vinson & Elkins’ global Aviation Finance team explores pivotal issues such as lease rate stabilisation, the transition away from LIBOR, and the aircraft asset-backed securities (ABS) market. The report also highlights macroeconomic factors, including interest rate shifts and supply chain constraints, that will shape the year ahead.

Key Insights for 2025:

• Resurgence of Lease Rates: A closer look at how lease rates are stabilising post-COVID, driven by increased demand for narrowbody aircraft and a tightening supply.
• LIBOR Transition: Practical strategies for navigating the final stages of the shift to Term SOFR in aviation finance.
• Supply Chain Challenges: Predictions for how ongoing disruptions will impact aircraft deliveries, retirements, and fleet modernisation efforts.
• ABS Market Rebound: The aircraft ABS market is experiencing renewed growth, fuelled by falling interest rates and heightened investor confidence.

“We’re seeing a renewed sense of optimism in the aviation industry, with strong investment growth prospects on the horizon,” said Niels Jensen, partner at Vinson & Elkins and co-head of the firm’s Aviation Finance practice. “While challenges remain, the industry’s strength and resilience should enable stakeholders to adapt to new market dynamics and capitalise on emerging trends.”

“The trends we are observing suggest a pivotal year ahead for aviation finance,” added David Berkery, partner at Vinson & Elkins and co-head of the firm’s Aviation Finance practice. “The rebound of the ABS market and rising aircraft trading volumes offer exciting opportunities, but dealmakers will need to manage risks carefully to ensure long-term success.”

For more insights and to read the full report, visit: Aviation Finance: The Outlook for Business in 2025.