View of wheels and engine underneath an airplane

23 Oct 2025

Aviation Market Snapshot - Q3 2025

Global aviation demonstrated continued resilience in August 2025, with passenger and cargo markets maintaining steady momentum despite a mixed economic backdrop.

Download the full Q3 Aviation market report pdf 6.24 MB

Aviation resilience holds firm as global travel and trade steady in August 2025

86%

industry's Passenger Load Factor (PLF)

The aviation industry continued to demonstrate resilience through August 2025, with both passenger and cargo markets showing steady, broad-based momentum despite an uneven global economic backdrop.

According to the IATA, global passenger traffic rose 4.6% year-on-year, marking another month of expansion and pushing the industry’s Passenger Load Factor (PLF) to a record 86.0% — the highest on record. International travel remained the key growth driver, climbing 6.6% YoY, led by strong performance from Asia Pacific (+9.8%) and African carriers (+8.9%).

Source: IATA Sustainability and Economics, IATA Information and Data - Monthly Statistics

Domestic markets were more subdued, expanding just 1.5% YoY, though bright spots emerged in Japan (+6.0%) and Brazil (+12.7%). European airlines maintained the world’s highest load factor at 87.9%, while Africa crossed the 80% threshold for the first time. Looking ahead, scheduled flights are expected to rise by 1.2% in September and 3.4% in October, signalling ongoing travel confidence.

Meanwhile, air freight activity held firm despite trade policy uncertainty. Global cargo demand, measured in CTK increased 4.1% YoY, sustaining six consecutive months of growth. Africa (+11.0%) and Asia Pacific (+9.8%) again led gains, offsetting a 2.1% decline in North America.

Trade lanes between Europe and Asia (+13.0%) and within Asia (+12.4%) posted double-digit growth, while the Africa–Middle East corridor surged 15.6%, reaching record volumes. Fuel prices continued to ease, with jet fuel down 6.4% YoY, though refining margins widened — a reminder of lingering volatility in input costs.

Collectively, these indicators point to a maturing post-pandemic aviation cycle marked by stability, high utilisation, and geographic rebalancing. The data highlight a shift in global trade and travel dynamics - with Africa and Asia increasingly shaping growth - and reinforce the aviation sector’s resilience as a cornerstone of global economic connectivity.

Derek Wong, Head of Aviation Debt Funds

The developments in the aviation loan ABS space enhance the appeal of aircraft-backed debt as an asset class and inject further dynamism into the market.

Interest rate and foreign exchange update

We are now about six months on from President Trump’s ‘Liberation Day’ announcements. The absence of retaliation to higher U.S. tariffs, along with trade diversion, has helped sustain global growth prospects and maintain overall resilience.

When making policy decisions, the FOMC continues to face the challenge of balancing the upside risks to inflation against the downside risks to the labour market. At its latest meeting, the Fed opted to cut rates by 25bps to 4.25%, a move Chair Powell described as a “risk management” cut. Although the President has made clear his desire for sharply lower interest rates, the FOMC appears inclined to proceed more cautiously for now.
The ECB finds itself in a relatively enviable position compared with its major central bank peers. While the economy experienced some distortions over the first half of the year, it has shown signs of underlying resilience in demand, with indicators also suggesting continued momentum into Q3. Inflation remains at target, and ECB staff projections indicate that price stability is likely to be maintained over the medium term.

In the UK, the MPC held the Bank Rate at 4.00% in September and voted to slow the pace of Quantitative Tightening to £70bn over the next 12 months, down from £100bn during the previous year. CPI inflation held steady at 3.8% in August, despite a reversal of July’s spike in airfares subtracted 0.17 percentage points from the overall rate. Inflation remains elevated, and most MPC members remain uneasy with the persistently high rate. They are seeking greater confidence that inflation is moving back towards the 2.0% target, which is one explanation for why markets are not forecasting any rate cuts for the remainder of 2025.

Investors are continuing to seek a more diversified asset portfolio, as seen by the sharp rise in the price of gold to record highs of over $4,000/oz. The euro continues to demonstrate strength against the U.S. dollar, although some of its gains have been pared back over the third quarter. Year-to-date, the EUR/USD remains notably strong, reflecting the euro’s solid performance against the dollar. A similar trend is evident with sterling, which has also appreciated against the dollar — reinforcing the broader narrative of dollar weakness throughout the year.

Download the full Q3 Aviation market report PDF 6.24 MB

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