Investec reveals cautious optimism in Aviation sector

Investec Bank plc, a leading international financial services provider, today announces findings from its recent survey of aviation industry stakeholders. When asked about business volumes over the next 12 months, more than half of respondents expressed confidence in growth, while the remainder expected only modest improvements. None predicted a decline, reflecting a resilient outlook across the sector despite global uncertainty.

Despite this optimism, stakeholders identified three critical challenges that could affect their businesses:

• Supply chain disruptions impacting operations
• Macro-economic volatility influencing market conditions
• The need for innovative financing solutions

Respondents also pointed to continued challenges in supply chain recovery. Only a small minority expected easing within the next year, while the majority anticipated a two to three-year timeframe. A smaller share believed pressures could persist even longer, underscoring the strain on aviation operations.

Views were mixed on the trajectory of new generation narrowbody engine values. Some expect further increases on top of escalation, while nearly half believe values have plateaued at current levels. Around a quarter expect values to soften within the next year, signalling caution in the market.

Expectations around lease rate factors were more restrained. Most do not foresee any increase, while a smaller group anticipate rises across both narrow and wide bodies. Only a very small number expect increases limited to specific aircraft types.

Clayton Woollgar, Head of Structured Finance at Investec Aviation commented: “Despite ongoing supply chain pressures and macroeconomic uncertainty, our survey reveals cautious optimism within the aviation sector, with many stakeholders anticipating growth in their businesses over the next year. In this challenging environment, having experienced partners and tailored financing is crucial for achieving growth amidst volatility. At Investec, our role is to help clients navigate these complexities with agility, ensuring they are equipped with the solutions and expertise necessary to adapt to market conditions and meet their growth targets.”

Investec’s aviation finance business combines deep industry experience with a flexible approach to structuring solutions. With many specialists bringing over two decades of expertise, the team supports airlines, lessors and investors with bespoke financing products across the capital stack, and advisory services tailored to complex needs. Its offering also extends to fund solutions, treasury and risk management, and corporate finance, enabling clients to manage risk, raise capital and finance fleets with confidence.