As the global aviation finance community gathered in Dublin for one of the most significant weeks in the industry calendar in January, SMBC Aviation Capital released its Plane Insights Q1 2026 report – an in‑depth look back at 2025 and an outlook for the year ahead. The findings paint a picture of an aviation sector that continues to defy wider macro‑economic headwinds, driven by persistent aircraft demand, constrained supply, and expanding global travel markets.
Aircraft Demand Remains Higher Than Supply
According to the report, 2025 was a strong year for commercial aviation, even as geopolitical tensions, trade frictions, and inflationary pressures weighed on the broader economic environment. SMBC Aviation Capital notes that aircraft demand continues to outstrip supply, with the trading market strengthening and diverse financing sources flowing into the sector.
The report highlights improvements in OEM performance, particularly Boeing, which SMBC says has met key production KPIs and begun ramping up output with better manufacturing quality. Airbus, while ending the year with emerging skin‑panel issues affecting the A320neo family, still delivered strong volumes, and overall fleet utilisation remains high.
Storage and Lease Rates Point to a Tight Secondary Market
Aircraft storage rates, especially for widebodies, continue to trend downward, reflecting the industry’s full‑utilisation mode. Lease extensions and re‑lease rates remain elevated, indicating limited availability in the secondary market. Airlines seeking lift are facing constrained options, especially in the large narrowbody segment, which is forecast to deliver the strongest growth in 2026.
Fuel Prices Ease, Offering Relief to Airlines
One of the more favourable trends for carriers is the continued decline in jet‑fuel costs. Overproduction in the oil sector pushed prices down through 2025, and the report forecasts a further decline into 2026, good news for operators wrestling with labour and maintenance cost inflation.
Slower Growth in Advanced Economies, Faster in Developing Regions
SMBC’s macroeconomic analysis notes that advanced economies are expected to dip below 2% growth in 2026, while developing nations may exceed 4% growth, helped by expanding middle classes, rising urbanisation, and increasing discretionary income, factors that strongly correlate with increased air travel.
Even with inflation remaining sticky in the U.S. and uncertainty around future interest‑rate movements, the aviation sector’s fundamentals appear resilient thanks to robust travel demand and tightening aircraft availability.
OEM and Airline Performance in Focus
SMBC Aviation Capital’s Strategic & Market Analysis team also reviewed 2025 airline and OEM performance, noting a divergence between macro sentiment and aviation’s operational strength. Airlines experienced solid traffic, widebody utilisation improved, and investors continued to favour aviation assets due to their stable returns and global demand profile.
The report also underscores how the secondary leasing space strengthened across the year, driven by high utilisation, limited new‑aircraft availability, and strong appetite for lift among both network carriers and LCCs.
Long‑Term Fleet Forecast
Looking ahead, SMBC’s long‑term fleet outlook points to continued global aviation growth driven by:
- Population expansion in underdeveloped regions
- Rapid urbanisation
- Growing middle‑class segments
- Ongoing demand for business, leisure, and VFR (visiting friends and relatives) travel
The result, SMBC argues, is a structurally strong demand environment that will support global fleet growth well into the next decade.
Conclusion
The Plane Insights Q1 2026 report reinforces a key message: despite economic unpredictability, commercial aviation remains in a position of strength. Aircraft supply constraints, improving OEM output, and accelerating travel demand are creating a highly favourable environment for lessors, airlines, and investors alike.
As Dublin continues to stand at the centre of the global aircraft leasing ecosystem, SMBC Aviation Capital’s latest insights offer a timely and optimistic outlook for the year ahead, and a reminder of aviation’s enduring resilience. Read the full report here.
