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  • Air travel demand: Is it faltering?

    Thomas Sweeney - Cirium Ascend Consultancy
    Thomas Sweeney - Cirium Ascend Consultancy

    Thomas Sweeney, Valuations Associate, Cirium Ascend Consultancy

    As the summer winds down and we look ahead to a busy couple of months of conferences and events, I wanted to examine how risks to travel demand – which seemed unknowable six months ago – have been shaping up. In April when President Trump announced sweeping tariffs, the ensuing economic uncertainty was as large a risk to the aviation sector as the direct impacts of tariffs on aircraft trading. The latter continue to be defined and negotiated but the former have gained some clarity. The US market is naturally the most directly affected by recent events, though instability and contraction in the US economy will always have global ramifications. As the issuer of the world’s reserve currency and a major source of sovereign debt held globally, US economic instability quickly impacts global markets through shifts in dollar value, Treasury yields, and the productivity trends that underpin global growth expectations.

    Economists have been asking if the US is in a recession. Shortly after the tariffs were announced many were predicting one, albeit mild. Government data suggests that the economy is growing, and recession has been avoided so far [1]. However, a common view among economists is that growth in the country is highly unevenly distributed between both sectors of the economy, socioeconomic groups and geographical regions[2]. Large investments into AI have resulted in strong growth for companies developing and utilising the technology. A second major driver of growth has been by the wealthiest segment of Americans. The top 10% of earners account for nearly 50% of consumption[3]. Has the demand for air travel been buoyed by wealthy spenders and AI investment or is there weakness indicative of a weaker economy outside these areas?

    Growth in US capacity (ASKs) is correlated to overall GDP growth, amongst other factors. The correlation is not direct – there are specificities in the airline market distinct from the general economy – but the link is clear:

    Source: Cirium Core and Federal Reserve Economic Data (FRED)

    Zooming in to the most recent months, domestic capacity has been growing slower in 2025 than 2024 and, in some months, capacity has contracted.

    Source: Cirium Core

    Several US airlines cut capacity from Q2 onwards in response to the economic uncertainty caused by tariffs. Planned domestic and international capacity has been cut by up to three percent by US airlines.

    Source: Cirium Core

    Capacity growth is recovering in the later part of the year, potentially as the uncertainty has waned in recent months. Nonetheless, apart from 2020 heavily influenced by the Covid-19 pandemic, 2025 appears to be the weakest year for capacity growth in a decade.

    The picture is consistent with a growing economy for which there remains significant risk. Travel demand (and resulting capacity) within the US is exposed to the high-growth sectors of the economy, especially wealthy consumers who travel more frequently and in higher yielding cabins. Cutting capacity growth and focusing on premium travel can be a positive for airlines, allowing them to keep yields high. In the second half of 2025, capacity growth has been much slower in economy class seats, with business class seats remaining more robust.

    Source: Cirium Core

    Average US personal consumption expenditures have grown at their slowest level since 2020[4], which has been translating into the softening demand and capacity growth, even if it’s in lower-yielding cabins and sectors. Travel demand, like the US economy more generally, is likely to be highly sensitive to the consumption of the wealthiest segment of Americans. Any downturn which affects the spending habits of this group, such as a slump in AI confidence and investment, could impact air travel demand quickly. With risk concentrated in this way, close attention must be paid to economic signals for this group.

    The US domestic market is markedly weaker than other regions. Despite the impact of tariffs on other countries, most do not show significantly weakened economies as compared to the beginning of the year. Global scheduled ASK growth is healthy, sitting between 4% and 6% for most of this year.

    Source: Cirium Core

    Global demand is remaining strong. However, the nature of the global economy and financial system is such that issues in the US have an outsized influence globally. US growth is currently resting on a few small groups. Softening there could have downstream effects on not just the US domestic airline market but passenger demand globally. Therefore, it is critical that we continue to monitor the health of this market for warning signs and proactively consider how we will navigate those challenges.

    Meet the Cirium team at Airline Economics Growth Frontiers London 2025.

    Hear from Thomas on the SAF Panel, Thursday 18th September 2025 at 14:00. Eleni Maragkou will join the Lease Rates & Valuations Panel, Wednesday 17th September 2025 at 11:40.

    [1] fred.stlouisfed.org/series/GDPC1
    [2] www.ft.com/content/e9be3e3f-2efe-42f7-b2d2-8ab3efea27a8
    [3] https://www.wsj.com/economy/consumers/us-economy-strength-rich-spending-2c34a571
    [4] fred.stlouisfed.org/series/PCECC96

  • A Marathon Mindset: The 2025-2034 Cirium Helicopter Forecast

    Sara Dhariwal, Senior Aviation Analyst, Lead Appraiser – Helicopters & AAM, Cirium Ascend Consultancy

    The past decade has for the helicopter industry been largely lived through a downturn. A prolonged period of significantly reduced oil prices affected production and exploration, which impacted the offshore support market. This turned relative undersupply to oversupply at a rapid speed leaving a substantial pool of excess helicopters, resulting in notable pressure on values. Growth slowed from a CAGR of around 2.5% prior to 2015, to 1.2% in the most recent decade. 

    In 2024 there was a fleet growth of 1.9% which is the strongest since 2015 signalling ongoing recovery.

    The growth has been supported by stable deliveries, and lower attrition – with fewer retirements and total losses. In 2024, there were almost 100 fewer retirement/total loss events than in 2023. This means that existing fleet is being used longer supporting the long useful lives of helicopters, which helps strengthening investment cases. It also marks a welcome and long-term improvement in terms of safety.

    Over the next 10-year period, the 2025 Cirium Helicopter Forecast anticipates a continued steady rebound at a pace of 1.3% year-on-year. The market is expected to welcome 7,500 new civil turbine helicopters, reaching a fleet of 27,700 by 2034. Key drivers will be the need for replacements and rising demand in emerging markets.

    Helicopter delivery forecast (2025-2034)

    Despite recovery from the oil and gas downturn and the Covid-19 pandemic, the 2025 forecast is 3% lower than 2024 due to ongoing supply chain constraints making lead times for new aircraft extensive. Annual deliveries dropped to 512 in 2020 but rebounded to nearly 700 in 2023, with no growth in 2024. A 5% decline is expected in 2025 compared to 2024, with gradual recovery projected and reaching 2014 levels (~790 units) by the early 2030s.

    Overall, the forecast anticipates –

    • 7,500 new civil turbine helicopters valued at $50 billion in 2025$ (based on a Base Full-Life Value for a typical utility machine) to be delivered over the next decade.
    • 54% of demand is expected to be driven by replacement, and 46% by fleet growth.

    Forecast annual civil helicopter deliveries 2025-2034

    Source: 2025 Cirium Helicopter Forecast

    Key factors stimulating future helicopter demand include:

    • Aging fleets, especially in North America and Europe.
    • Recovery in offshore oil support and growth in Asia-Pacific.
    • Introduction of new models (e.g., H140, R88, Bell 525).

    In 2024, there were 225 helicopters recorded as retired which was 100 fewer than 2023 and likely a result of a combination of high demand and constrained supply, as OEMs find challenges in despatching new helicopters due to ongoing supply chain issues. Subsequently and whilst deliveries are not predicted to increase significantly in the near term due to the challenges, it leads to longer use of the existing fleet.

    Longer use underpins the asset class having strong residual values, supporting investment.

    Helicopter replacement demand

    Over the last 10 years, Cirium recorded approximately 2,200 permanent retirements, averaging around 1% of the fleet annually. This retirement rate is relatively low compared to commercial fixed-wing aircraft standards.

    The average age of retirement in the past 10 years has been at 37.5 years.

    Besides the physical retirements, there is also attrition from the fleet through accidents (total losses), which has to be factored into replacement demand and can be added to retirements.

    Cirium Ascend monitors the total losses for helicopters and some 1,200 were recorded in the past 10 years. As helicopters operate in many different roles and environments, their loss rate can be comparatively high versus other commercial aviation sectors.

    On a per year basis, some 1% of the fleet was being lost 20 years ago, but the trend has been declining and has been at just 0.5% in the most recent ten-year period. In 2024, the recorded rate was a record low of only 0.4%. This effectively means there is replacement demand for an average of 1.4% of the fleet annually, or 4,050 civil turbine helicopters in the next 10 years, which is 17% of the current total fleet.

    Helicopter fleet growth outlook

    Forecast civil helicopter fleet to 2034

    Source: 2025 Cirium Helicopter Forecast

    By 2034, the global fleet is projected to reach 27,700 helicopters, growing at a slow but steady 1.3% annually, slightly higher than the previous decade’s rate.

    North America is projected to remain the largest market, followed by Europe. The projection for Asia-Pacific has been revised in the 2025 forecast due to growth slowing down in recent years following restriction on airspace usage in China, impacting demand for helicopters.

    Slow but steady seems a good pace for the helicopter market. The pre-2014 sprint approach to secure quick returns failed. Few held on to those returns as the oil and gas downturn led to financial hardship across the industry.

    Some would argue that slow and steady is “boring” and implies that there isn’t anything of interest going on in the market. The stronger argument is possibly that slow and steady provides companies the time required to make better, more considered long-term strategic decisions.

    The past decade suggests that discipline, and resilience alongside consistency, pacing, and the ability to learn from experience and adapt to unexpected situations is key. In other words, a Marathon Mindset, rather than that of a sprint.

    REQUEST THE FULL 2025-2034 CIRIUM HELICOPTER FORECAST HERE

  • Rob Morris: Reflecting on a 35-year career in aviation

    When Rob Morris checks out from Cirium Ascend Consultancy‘s London Heathrow headquarters at the end of August, he will be calling time on a 35-year career in which he has gone from British Aerospace market analyst to influential voice that resonates across the ever-changing global aviation industry.

    As will be familiar to many in the industry, the spark of that career began in childhood, says Morris, recalling that he received a pair of binoculars one year for Christmas and headed down with his brother to Heathrow to try them out.

    “We spent a day watching the planes, and my passion for aviation was born just looking at those planes.”

    That spark ignited something, but Morris admits he was “a fairly naive teenager, not knowing what I really wanted to do”, so settled on studying chemistry, which led to a job with the United Kingdom Atomic Energy Authority in the 1980s.

    The shift into aviation would not come until 1989 when he applied for a database analyst position at British Aerospace, but the role was already filled. However, as a market analyst had just left the company, Morris was invited back to interview for that role. This resulted in a career change at age 27, to start work at BAe in Hatfield.

    “And I still remember sitting there in May 1990, my first day in Hatfield thinking: ‘Am I getting paid to do this? That’s robbery!’”

    He primarily worked on BAe’s Worfleet database, with the task of running queries of fleet data and at times the ABC Schedules database – a grounding for his later role leading consultancy at Cirium.

    “Everything our team says now is based upon a reading of the data and interpretation of the data, the trend of the data, that kind of thing. So having been privileged enough to work with Cirium and being able to go and present that data to the world has been an end of my career that I could never have imagined.”

    Back in the early 1990s, as a 27-year-old new entrant to the business, Morris quickly immersed himself into the industry and its dynamics, largely through attending conferences.

    “I sat and listened to what people were saying, and I vividly remember my first finance conference in Geneva around 1991 where I sat there and thought: ‘What are they talking about? I need to go and learn about this,’” he recalls.

    As that was occurring, though, BAe itself was transitioning from OEM to supplier and later to defence contractor BAE Systems.

    For Morris, this meant that instead of having “a job for life”, within a few years he would have to make a career move as the manufacturer moved production away from its Hatfield site.

    That led to a role with the UK’s Department of Trade and Industry, which included a lot of time working with Airbus, which was just starting to overtake McDonnell Douglas as the second-largest airframer in the world.

    From there, he joined BAE Systems Asset Management – the forerunner to Falko – before joining Ascend in January 2012, not long after the business had been acquired by the parent of what is now Cirium.

    “I thought I’d just be a senior consultant, but then in 2014 came the chance to lead the business, and together with our Head of Valuations George Dimitroff, we became the leaders of Ascend.”

    Leading an award-winning team

    That ascendancy came as Cirium, under previous branding, was in its own transition from publisher to aviation data provider through several acquisitions, which expanded the consultancy team’s available toolbox considerably, and allowed Morris and the team to focus on delivering data-driven insights, which has continued to grow.

    “We had fleets data and we had values and lease rates. Then we got the schedules and then latterly we got tracking, [which] is just fabulous because tracking tells us what’s happening in real time or in near-real time.”

    Asked about his professional highlights, Morris points to Cirium Ascend Consultancy’s ten wins of the Airline Economics Appraiser of the Year award.

    “Appraiser of the Year is the only way the market can recognise us publicly other than giving us their business, so winning that, keeping the confidence of the team in the market has been really important for us,” he says.

    Another key achievement has been building up the skills of the consultancy team, including adding more ISTAT- and ASA-certified appraisers.

    “Developing the team has become probably the thing I’m proudest of at the end of my career, just being able to try and help to mentor more junior members of the team,” he says. “And that’s what I’m going to miss the most: working with those people day to day. But of course, with global connectivity, I’ll still be able to connect with those people most days. So I’ll be watching closely to see the industry continue.”

    Constants and change

    Over Morris’s 35-year career he has witnessed some major changes in the market, including tracking closely the rise of Airbus into its current duopoly with Boeing in the large-jet market.

    “I’ve never stopped learning,” he reflects. “Every day this industry teaches you something new, and that’s why it’s so fascinating and why it’s such an exciting industry. Because it’s only with 35 years’ hindsight can you see the big changes that have happened, but each day you don’t really see them.”

    Another big change Morris notes is the rise of operating leasing, which now finances just over half of new deliveries – a far cry from where it was when he started in the industry.

    “Back in 1990, leasing was hardly a thing, and I’m sure most of the financing was either sovereign debt or bank debt. Now you have these financial institutions that are more effective at raising capital than airlines which can manage the asset for financial gain.”

    He also bore witness to some key shocks, most notably 9/11 and the Covid pandemic.

    Of the post-9/11 crisis, Morris, who was then working at the Department of Trade and Industry, recalls: “It was the first time in my career that things were changing daily, and we were trying to understand how they were changing.”

    But the Covid pandemic and the rapid recovery of demand thereafter, which has led to major disruption of the supply chain across the industry, gave rise to a whole new scenario.

    “We’ve come out of it far more quickly than we expected to, and the OEMs and their suppliers have been caught on the hop. Supply is lagging demand, and we can hypothesise about how much, and where the equilibrium is, et cetera, but it is a fact that it is lagging, new aircraft supplies lagging demand, and that’s a big issue.”

    In the same breath, though, Morris notes that traffic demand is slowing this year, and that growth is forecast at around 5% instead of the 8% predicted at the start of the year.

    That leads him to another insight: “I’ve always said in the periods when we’ve got growth, my job is to say ‘Calm down’ and in the periods when we’ve got decline, my job is to say: ‘It’s fine, it’ll be OK. Cheer up, don’t get caught up in the moment because we’ve got a long-term growth industry.’

    “I’m probably a pragmatist, but I’m an optimist by nature of the industry because of those underlying fundamentals that are strong.”

    He also points out that for all that has changed, the fundamentals of aircraft design have not.

    “When I think about the aircraft that we were delivering in 1990, like the A320 which today has had new engines and a slightly different wing, the geometry is still a cigar tube with wings on it.

    “And the 787 looks very similar to the 767 that was being delivered in 1990 – OK, with different materials – but similar geometry. So the efficiencies have been more incremental than fundamental.”

    What next?

    Morris warns that this poses a problem for the industry as it may hold back the kind of progress on emissions that will make it a larger target for politicians to take action against to constrain its growth.

    “If we don’t do enough, then regulators will do more. They’ll say if the only way to decarbonise aviation is to make flying less attractive, and the way to make flying less attractive is to make flying more expensive.

    “If we, if the businesses don’t deal with it, then eventually the regulators will deal with it. Now it might be too late for the planet by then, but they’ll still deal with it.”

    More positively, as a long-time data watcher, Morris is curious about how artificial intelligence will play a greater role in decision making for the industry.

    “I’m kind of getting out at a strange time because I’m getting out at a time when all these things are changing, but actually the point is that as you get older, change becomes harder to manage and deal with.

    “You know, doing things in a certain way becomes not comfortable, but it becomes what you do and it’s harder to exit your comfort zone at 60-something than it is at 20-something.”

    More immediately, though, Morris says he has not given much thought to his next move after leaving Cirium.

    “I do know that my garden needs a lot of work. I do know that I need to spend more time with my family and I do know that I want to spend more time watching my football team, Reading.”

    He muses that he may write a book about the club; and travel is also high on the list of priorities, although more of that may be on the ground given how often work has taken him around the world over several years.

    “I don’t want to get on aeroplanes quite so much,” he admits.

  • How High-Speed Rail is Reshaping Chinese Regional Air Travel

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    Scott Zhao
    Scott Zhao

    Scott Zhao, Principal Aviation Analyst, Cirium Ascend Consultancy

    China’s transportation landscape has undergone a quiet but profound transformation, one that is redefining how people move across the country and recalibrating the roles of air and rail in the national mobility ecosystem. At the heart of this shift is the rapid rise of high-speed rail (HSR), which has not only captured market share from short-haul aviation but has fundamentally altered traveller behaviour, airline network strategies, and urban connectivity.

    With a series of strategic milestones, from the 2007 railway speed-up, when several existing lines were upgraded to support operations at speeds of up to 250 km/h, to the 2017 launch of the 350 km/h “Fuxing” trains, China has built one of the world’s most advanced HSR network, one that now outperforms air travel on many regional routes.

    For urban travellers in China, the total time from home departure to passing security at the terminal is a critical factor in mode choice. Despite the speed of air travel, the full door-to-security journey often favours high-speed rail, especially for trips under 800 km. This analysis compares average total travel times from a typical urban centre residence to completing security at major airports versus high-speed rail stations across China’s first-, second-, and third-tier cities. This advantage is evident across city tiers.

    Average total time – home door to security clearance:

    City tierAirport (door to security)HSR station (door to security)Time saved by HSR
    First-tier (e.g., Beijing, Shanghai)120 min75 min45 min
    Second-tier (e.g., Chengdu, Hangzhou)105 min65 min40 min
    Third-tier (e.g., Nanchang, Luoyang)85 min50 min35 min

    Note: averages based on typical urban residential areas, non-peak traffic, and standard security wait times

    The time savings stem from three key factors: HSR stations are typically 10–15 km from city centres, compared to 25–40 km for airports; access is faster and less prone to congestion; and security screening is more efficient, with shorter queues and less stringent protocols.

    Time breakdown by component (typical first-tier city):

    StepAirportHSR station
    Home preparation & departure15 min10 min
    Distance to terminal25–30 km10–15 km
    Travel time (car/taxi)55 min30 min
    Parking / entry / walk-in15 min10 min
    Security screening & queue35 min18 min
    Total~120 min~75 min

    Data source: urban mobility surveys, traffic analytics (2023–2024), and operational benchmarks from major Chinese transport hubs

    These advantages explain HSR’s dominance for trips under 800 km, where it offers faster, more reliable, and more convenient service than air, even when flight time is shorter.

    The impact on aviation is clear. As HSR expanded, short-haul flights began to decline in relative importance. The data from Cirium SRS Analyser illustrates a structural shift in domestic air travel patterns:

       Count of total flightsAvg. distance kmFlight count (≤800 km)Flights ≤800 km (as a % of total)Avg. distance (≤800 km flights)
    2011 Q1395681147710454926.4%550
    2013 Q1469721153911836325.2%561
    2015 Q1562112156313035923.2%556
    2017 Q1689640153715202222.0%549
    2019 Q1828744151417544221.2%557
    2024 Q1967186160515781916.3%583
    2025 Q1960944161015267515.9%581

    Data source: Cirium SRS Analyser, all figures refer to scheduled flights only

    While total flight volume has more than doubled since 2011, growth has plateaued in recent years, with a slight dip observed in Q1 2025 suggesting market saturation. More significantly, the average flight distance has increased from 1,477 km to 1,610 km, while the share of short-haul flights (≤800 km) has declined sharply from 26.4% to 15.9%. This shift is not incidental; it reflects the growing impact of HSR on route-level demand. As high-speed rail has expanded and gained preference for sub-800 km journeys, airlines have responded by reallocating capacity toward medium- and long-haul segments, where air travel retains a competitive edge.

    Rather than eliminating demand for air travel, HSR appears to be reshaping it. The above data suggests that airlines may be gradually shifting their focus away from saturated short-haul routes – particularly in regions where HSR provides strong competition – and toward longer domestic flights, international services, and markets where high-speed rail coverage remains limited. These may include parts of western China, smaller cities, or corridors requiring multi-stop connectivity. While further analysis is needed to confirm the extent of this realignment, the observed trends point to a broader strategic adaptation by airlines in response to evolving competitive dynamics.

    The implications for fleet demand are therefore complex. While HSR appears to have suppressed growth in the short-haul segment, this does not necessarily equate to an overall reduction in aircraft needs. Instead, demand may be shifting toward aircraft better suited for longer distances. Cirium’s forecast of over 6,600 new single-aisle aircraft in the next 20 years is driven not just by fleet renewal, but by structural changes in route design and demand profiles, especially as more airlines prioritize efficiency and range in their future operations.

    China’s evolving air network illustrates how modal competition can catalyse innovation and resilience. The rise of HSR has challenged airlines to redefine their role, moving from head-to-head competition to strategic differentiation. The future of mobility in China may not be rail versus air, but rail and air functioning in a more integrated ecosystem. HSR delivers strong regional and intercity access, while aviation continues to lead in long-haul and international connectivity. Together, these modes have the potential to support a more balanced, sustainable, and passenger-oriented transportation system.

    For policymakers and industry leaders, a key takeaway is that high-speed rail need not be viewed solely as a competitor to aviation, but as a potential enabler of broader transport efficiency. By exploring multimodal integration through coordinated scheduling, ticketing, and infrastructure planning, China may be developing a model that reduces redundancy, enhances connectivity, and improves system resilience. Its evolving experience offers valuable insights for other countries planning or expanding high-speed rail networks.

    It is important to note, however, that this analysis has limitations. The time comparisons in Tables 1 and 2 are based on generalized assumptions for typical urban travellers under non-peak conditions. Moreover, the 800-km threshold, though widely used in industry and media, should be interpreted as a flexible benchmark rather than a fixed cutoff. Future research could extend this analysis to routes in the 800–1,000 km range to better understand the full extent of modal overlap and passenger preference shifts as HSR networks continue to evolve.

  • South Side Story – Southeast Asian Airlines’ Stalled Growth

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    Thomas Kaplan Senior Valuations Analyst, ISTAT Appraiser
    Thomas Kaplan Senior Valuations Analyst, ISTAT Appraiser

    Thomas Kaplan, Senior Valuations Consultant, Cirium Ascend Consultancy

    News that AirAsia had signed for up to 70 A321XLRs earlier this month certainly raised eyebrows. An airline that already has such a large backlog, and which is still emerging from restructuring, should not, on the face of it, be adding more orders. Reading beyond the headlines, however, the 70 A321XLRs are only commitments, not firm orders. AirAsia Group’s firm orderbook stands at 402 aircraft, all A321neos (including 20 XLRs) save for 15 A330neos. Its in-service passenger fleet comprises only 219 aircraft (mostly A320-family jets, plus 24 A330neos), which is still fewer than the 240+ it was operating in 2019.

    In 2015, we prepared a slide deck showing the airlines in Asia-Pacific that had orderbooks far larger than their in-service fleets. Two airlines were outliers: Lion Air and AirAsia. Our message at the time was these airlines had managed double-digit growth rates in the past and it was theoretically possible for them to absorb their orderbooks if they managed to continue the same growth trend.

    There were reasons to be optimistic about Southeast Asia’s air travel market. The 640 million people spread across islands and narrow peninsulas were getting richer and they’d sooner or later take a flight. Tourism was booming, and it seemed Chinese tourists would provide an endless source of demand. The ultra low-cost carrier (ULCC) model applied by AirAsia and Lion Air was seen as the best way to capture and drive that growth.

    Ultimately, the story of fast-paced growth was not to last. Economic and geopolitical factors along with the competitive dynamics of a ULCC turf war all contributed to a decade of slowed growth.

    The chart below shows the compound annual growth rate of the in-service narrowbody passenger jet fleet of Southeast Asian airlines with the largest orderbooks, compared with the region’s overall fleet growth. Looking at five-year periods (but shifting 2020 to 2019 in order to isolate pre-pandemic figures), we can see 2005-2015 was a time of very rapid growth for AirAsia and Lion Air with sustained periods of over 20% annual growth. The Southeast Asian fleet also grew at around 10% per year throughout that decade.

    The period of 2015-2019 brought a marked reduction, to single-digit levels, with AirAsia’s narrowbody fleet growing at the same pace as the rest of the region’s fleets. VietJet, which was Vietnam’s ULCC, tripled in size from 24 to 76 aircraft, but added fewer aircraft than Lion Air did and only slightly more than AirAsia.

    Since 2019, growth has been a struggle for all these players. Over the past six years, the Southeast Asian narrowbody jet fleet actually shrunk at a rate of 1% per year, and the highest ULCC compound annual growth rate was VietJet’s 3%, a far cry from the >20% the region’s high-flyers had achieved in the past.  

    Filters: Narrowbody jets, passenger usage, years calculated as 1 July, company category Airlines. Southeast Asia is defined as: Brunei, Cambodia, East Timor, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam.
    Source: Cirium Fleets Analyzer

    The stalled growth raises questions about the remaining substantial orderbook. Southeast Asian Airlines have 1,366 narrowbody passenger jets on order, representing 144% of the current in-service fleet. By comparison, the world’s backlog share of in-service narrowbody fleet is only 66%.  Large Southeast Asian ULCCs’ backlog can be 180% to over 300% of their in-service fleets, which are about the same level as they were 10 years ago. The chart below shows this, while omitting the pandemic years in which the temporary parking of aircraft led to a small in-service fleet, artificially inflating orderbook share.

    Filters: Narrowbody jets, passenger usage, years calculated as 1 July, company category Airlines. Southeast Asia is defined as: Brunei, Cambodia, East Timor, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam.
    Source: Cirium Fleets Analyzer

    Southeast Asian airlines are not taking deliveries fast enough to make a dent in their orderbooks and bring them back to stable levels. Supply chain issues that have been plaguing the industry are partially to blame, but the slowing fleet growth began before the pandemic and the Max grounding. Southeast Asia’s peak for passenger narrowbody jet deliveries was back in 2014 at 126. That is more than has been delivered since the start of 2020.

    A replacement cycle rather than a growth cycle may finally drive deliveries, but there are problems with orders placed so far in the past. AirAsia placed a massive order for 200 A320neos back in 2011. To date, only 55 A320neo family aircraft have been delivered to the group. It may have received a good deal from Airbus at the time, but what does 14+ years of escalation do to delivery pricing? Orders were likely renegotiated during the pandemic as the group also went through general restructuring, but escalation continues to increase the eventual delivery pricing.

    Southeast Asia is not the only place with a very large narrowbody jet orderbook as a share of in-service fleets. India, Saudi Arabia and Hungary (home to Wizz Air) stand out with orderbook shares at over 200%. It can be argued these have growth potential in different ways, but the ULCCs of Southeast Asia appear to have over-ordered given the trend of the last decade.

    This does not risk causing global oversupply, as OEMs cannot deliver fast enough to meet the global demand in any case. However, the backlog increases the risk for those airlines with growing liabilities in terms of escalating delivery pricing in an ultra-competitive market which appears not to be growing as fast as their ambitions.

  • Is Commercial Aviation Cruising or Climbing?

    Commercial aviation faces a complex landscape in 2025, showing clear momentum while facing new challenges that hold the potential to reshape the sector’s trajectory.

    In Commercial aviation in 2025: cruising or climbing?, MUFG’s Head of Aviation Research joined Cirium Ascend Consultancy’s Max Kingsley-Jones and Sofia Zoidou to explore the key factors shaping the industry’s path forward. In a lively and wide-ranging discussion, they shared data, insights and perspectives on commercial aviation’s outlook in the near-term and beyond.

    Tariffs Create Industry-Wide Uncertainty

    Trade tensions dominated much of the discussion, with tariffs emerging as a significant and wide-ranging risk factor. Max Kingsley-Jones emphasized that “tariffs pose a risk to all the parameters, be it demand, supply, and also to aircraft values.” He pointed to slowing demand for cargo already showing in tracking data, with international cargo flights demonstrating a sustained year-on-year decline since mid-May in markets touching North America.

    On the risk to aircraft values, Max explained that new aircraft values are unlikely to increase due to the tariff themselves, as this ‘tax’ is not an intrinsic part of the asset’s value. However, if tariffs cause a reduction in new aircraft deliveries, that will further tighten supply and increase positive pressure on secondary market values and lease rates.

    The ripple effects of tariffs will extend beyond manufacturers. Simon Finn highlighted aviation’s unique vulnerability, noting “it’s difficult to think of another industry that’s more globalised than aviation.” He pointed to how the industry’s interconnectedness leads tariff impacts to cascade throughout the supply chain, forcing manufacturers to determine what is passed onto the customer, and if they can’t, how to absorb the costs themselves.

    Production Recovery Faces Continued Delays

    Despite ongoing efforts to scale production, original equipment manufacturers (OEMs) remain behind their pre-pandemic output levels. The industry continues to grapple with supply chain constraints that have pushed full recovery timelines from 2025 to 2026.

    Current projections show the challenge ahead. Max noted that manufacturers “are still going to be behind in 2025,” compared to their stated targets, with much depending on supply chain. Cirium recently reduced its 2025 delivery projection by 3% as these issues persist, with only 40% of the revised target achieved during the first six months.

    Airbus faces particular scrutiny in meeting delivery targets. The company delivered 232 A320neo family aircraft in the first half of 2025, representing about 38% of the full-year forecast. Engine availability remains a bottleneck, with approximately 40 additional aircraft ready for delivery once their CFM LEAP engines arrive.

    Boeing’s recovery trajectory appears more promising, though both manufacturers must navigate ongoing supply chain complexities that continue to constrain industry-wide production capacity.

    Engine Supply Chain Bottlenecks Persist

    Engine availability has emerged as a critical constraint on aircraft deliveries. CFM’s LEAP engines power a significant portion of new aircraft, but supply limitations have created delivery delays across the industry.

    The data reveals the scope of this challenge: about 40 aircraft remain as “gliders” awaiting their LEAP engines before delivery completion. CFM accounted for 54% of total A320neo family deliveries in the first half of 2025, highlighting both the engine’s market dominance and the bottleneck’s industry-wide impact.

    These engine-related delays contribute to the broader production constraints facing manufacturers as they work to meet airline demand and fulfil existing order backlogs.

    Future Aircraft Development Accelerates Despite Current Challenges

    Looking ahead, the industry shows signs of preparation for the next generation of commercial aircraft. Both manufacturers and suppliers are advancing technologies that will define aviation’s future, even as current production faces constraints.

    Airbus continues developing its next-generation single-aisle aircraft, targeting a launch by 2030 for delivery around 2038. The CFM RISE open-fan engine technology, showcased as a potential powerplant for this program, represents significant advancement in propulsion efficiency.

    Simon expressed optimism about engine technology readiness, stating it’s “fair and reasonable to expect the engine manufacturers to push their technologies and have something ready for the early 2030s.”

    Market dynamics also support future growth. Airbus and Boeing combined net orders in the first half of 2025 exceeded 1,000, approaching the full-year 2024 total of 1,171. This strong order momentum, boosted by 300 orders added in June alone, indicates sustained airline confidence in long-term demand recovery.

    The emergence of new competitors adds another dimension to future market dynamics. Simon suggested China’s political will to produce an indigenous commercial aircraft may see Comac emerge as a major manufacturer in the long term. He pointed to favourable historic parallels with Airbus’s emergence, but cautioned this may take a decade or more to materialize. “Comac is in a powerful position, but there’s a lot of work to do”.

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  • Middle East Aviation: Key Market Insights From Latest Outlook

    The Middle East aviation sector continues to outpace global growth trajectories, with compelling data revealing the region’s expanding influence on international aviation markets. Recent analysis of regional performance metrics demonstrates sustained momentum across multiple indicators, positioning Middle Eastern carriers as significant drivers of global aviation recovery and future expansion.

    Watch the Middle East Market Outlook

    Market Share and Growth Trajectory

    The Middle East represents approximately 6% of the global aviation market by multiple measures. According to Cirium’s global Schedules data, the region accounts for 6.1% of total global scheduled capacity, while the passenger fleet in service represents 6.2% of the worldwide total.

    However, the region’s growth rate significantly outpaces global averages. Since 2010, Middle Eastern capacity has grown at 5.7% compound annually, compared to the global rate of 4%. This growth momentum continues into 2025, with Middle East international traffic expanding at 6% for the first five months of the year, ahead of the total market’s 5.8% growth.

    Fleet Development and Investment Pipeline

    The region’s fleet expansion tells a particularly compelling story. Middle Eastern single-aisle fleet development has surged more than 35% since July 2019, dramatically outperforming the global development rate of approximately 15%. Twin-aisle passenger fleets have similarly outperformed, growing nearly 3% above 2019 levels while global twin-aisle fleets remain around 2% lower.

    Three major markets – UAE, Saudi Arabia, and Qatar – each maintain aircraft backlogs exceeding 100% of their current installed fleets. The total regional backlog encompasses approximately 1,615 aircraft scheduled for delivery through 2035, representing roughly $200 billion in 2025 economic conditions.

    Financial Performance Strength

    Middle Eastern airlines have demonstrated exceptional profitability recovery. While representing 6% of global fleet capacity, the region contributes more than 12% of total global airline profits. IATA projects the region will generate $5-6 billion of the estimated $36 billion in global airline net profits for 2025.

    This financial strength has enhanced the region’s creditworthiness with lessors. Operating lessors manage approximately 50% of single-aisle aircraft and 40% of twin-aisle aircraft in the region, with the higher twin-aisle leasing percentage indicating lessor confidence in Middle Eastern airline credit quality.

    Environmental Considerations

    The region faces sustainability challenges that require attention. Despite representing 6% of the global fleet, Middle Eastern airlines generate approximately 10% of global aviation emissions, primarily from twin-aisle operations. This intensity reflects the region’s role as a major connecting hub for long-haul international travel.

    As the industry moves toward net-zero commitments, replacing current-generation aircraft with more fuel-efficient models like the 777-9, 787, A350, and A320neo family will be crucial for reducing the region’s emissions intensity.

    Looking Ahead

    Cirium’s Schedules data projects Middle Eastern regional capacity growth between 5-10% on a year-over-year basis through the remainder of 2025, maintaining the region’s position above global growth trends. This projection aligns with the substantial aircraft delivery pipeline required to absorb the significant backlog.

    The region has also established itself as a growing center for aircraft leasing, with two companies now ranking among the world’s 25 largest lessors by fleet value. This development reflects recognition of operating leasing as an efficient aircraft financing method and suggests continued growth in this sector.

    These insights underscore the region’s continuing evolution as a critical global aviation hub, supported by strong financial performance, significant investment commitments, and strategic positioning in international connectivity markets.

    Watch the Middle East Market Outlook in full.

  • Emerging Freighter Market Dynamics in H1 2025

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    Yinan-Qin

    Yinan Qin, Senior Aviation Analyst, Cirium Ascend Consultancy

    Traffic and Yields

    Based on Cirium’s year-to-date cargo flight data for 2025 across the major cargo traffic lanes, we observed a sharp decline in flight activity around February, coinciding with the announcement of new US tariffs. However, flights rebounded quickly as carriers employed front-loading strategies to mitigate tariff impacts before the initially announced effective date in May 2025. The latest data indicates that routes connecting to North America have been the most significantly affected. Unlike passenger flights, cargo operations are more flexible and responsive to market changes. As such, we anticipate continued in-time adjustments in cargo flight schedules in response to tariff developments. However, when and how future tariff issues will be resolved is still unclear at present.

    Note: (narrowbody/widebody freighters) * total = all Asia-Pacific and Europe to North America, and Asia-Pacific to Europe
    Source: Cirium Core

    Global air cargo yields, which are also highly sensitive to market dynamics, were volatile from 2020 to 2022 but have stabilised since late 2023, staying about 33% above pre-Covid levels. On major long-haul routes like Europe-North America, rates are back to pre-pandemic levels, while Asia-Europe and Asia-North America rates remain elevated due to capacity constraints and geopolitical tensions. While the full impact of US tariffs on yields remains to be seen, a return to pre-Covid pricing levels appears unlikely in the near term.

    Freighter Fleet Overview

    The global freighter fleet has grown steadily over the past two decades. As of mid-2025, there were over 1,400 widebody and more than 800 narrowbody freighters in service. Growth in widebody freighters has been driven by new factory-built freighters, Passenger-to-Freighter (P2F) conversions, and reactivations of aging widebody freighters during the pandemic. Narrowbody freighters also surged in popularity but now face an oversupply issue, with roughly 26% in storage compared to 13% for widebodies — both figures remain above pre-pandemic levels.

    A closer examination of the stored fleet reveals that a higher proportion of inactive narrowbody freighters, particularly the Boeing 737-800 and Airbus A321, are owned by lessors compared with widebody freighters. Many of the parked narrowbody freighters are awaiting conversion or struggling to secure lessees that would be willing to pay a rent premium for the high feedstock and conversion costs. Additionally, the overheating engine leasing market may also encourage lessors to lease engines out separately to obtain better premiums than leasing the entire freighter.

    Note: Widebody and Narrowbody Freighters only
    Source: Cirium Fleets Analyzer

    P2F conversion activity slowed significantly this year, especially for the Boeing 737-800, with only 15 conversions completed. About 48 aircraft, mostly widebody freighters, are scheduled for conversion in 2025. The conversion backlog has dropped to around 320 units, mainly comprising the Boeing 737-800, Airbus A321, Airbus A330 and Boeing 777-300ER. However, some backlog aircraft may return to passenger service due to rising conversion costs, weakening freighter demand, and supplemental type certificate (STC) approval delays.

    Note: Widebody and Narrowbody Freighters only
    Source: Cirium Fleets Analyzer

    On the factory-built freighter side, about 25 new freighter orders have been placed so far in 2025, mostly for the Airbus A350F and Boeing 777-200LRF. Qatar Airways has placed the largest order for the upcoming 777-8F, while the Airbus A350F has attracted a broader customer base, including lessors. With production of the Boeing 767 and 777 set to end in 2027 and current order slots likely sold out, the market may face a potential supply shortage. Ongoing OEM delivery delays and uncertainty surrounding Boeing 777X certification could further contribute to the anticipated production gap in the short to medium term.

    Source: Cirium Core; Press Release

    An analysis of Cirium Market Values of selected key 20-year-old freighters indicates that Market Values have remained resilient over time, particularly for widebody freighters. The only exception has been the Boeing 747-400F, whose decline in value is largely due to its Market Value now being primarily driven by engine. A similar trend is observed in the leasing market. Lease Rates have remained generally robust following the volatility experienced during the pandemic.

    The sustained demand for widebody freighters, combined with continued delays in the delivery of new factory-built freighter, slow progress in the certification of the Boeing 777 P2F conversion programme, rising maintenance costs, and limited MRO slots are all contributing to the resilience of current Market Values. These factors are expected to continue placing upward pressure on freighter valuations until supply-side constraints ease. As such, we anticipate that Market Values will likely remain robust in the near term.

    Note: Value as of June 2025
    Source: Cirium Valuation Analyzer

    In conclusion, the global air cargo market is expected to remain supply-constrained in the near future, especially for widebody capacity. Despite North America’s status as a key air cargo market segment, routes to North America face the most immediate uncertainty due to tariffs, broader structural factors – including limited production capacity, slowing P2F conversions and elevated yield levels – suggesting a prolonged period of moderate demand and a mix of continued tight supply (widebodies) and gradually decreasing oversupply in the short-to-medium term.

  • Five Things We Learnt From the 2025 Paris Air Show

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

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    Max Kingsley-Jones Valuations Manager, Cirium Ascend Consultancy


    As ever, there was a lot going on around the Le Bourget chalets and halls, but here are some key takeaways:

    Airbus’s home run: The “home” OEM made the most noise as is usually the case, announcing some 400 orders and commitments during the show. Boeing, which has traditionally played down its participation in the so-called air-show “order race”, was intentionally quiet this time amid the Air India 787 tragedy which occurred just prior to Le Bourget. Despite Boeing’s low-key approach, total announcements at the show for commercial aircraft amounted to almost 600 orders and commitments.  The show sales tally might have been even higher had anticipated announcements materialised from AirAsia (for “100” small single-aisles – A220s or perhaps E-Jet E2s) and Turkish Airlines (long-expected large order for 737s and Boeing twin-aisles).

    Paris 2025 Commercial Aircraft Orders and Commitments

    Source: Cirium Fleets Analyzer/OEMs (*ANA order, not announced by Boeing; ** two DHC orders)

    Power play: The CFM RISE open-fan powerplant mock-up was a crowd pleaser on Safran’s stand in Le Bourget’s main exhibition hall. The concept is in the news as a potential front-runner to propel Airbus’s proposed next-generation single-aisle. With Airbus saying it aims to launch the new aircraft by the end of this decade, the open-fan architecture of RISE alongside is under evaluation alongside advanced shrouded-fan design concepts from rival engine OEMs. To that point, Pratt & Whitney outlined the progress of its work with fellow RTX company Collins to ground-test and then fly a hybrid-electric version of the A320neo’s PW1100G. Meanwhile the P&W Canada division disclosed that it is working closely with Airbus’s regional arm ATR to study a hybrid-electric powered turboprop derivative, in what is effectively a reboot of the regional aircraft OEM’s Evo project. This reduced-emissions design had previously been slated for a 2030 debut, but the target now is around 2035.

    Big twin: The A350-1000 had a particularly strong show, securing a total of 35 orders and 25 commitments from two clients – Riyadh Air and Starlux Airlines. Sales of the largest A350 variant have been solid this year to date, with the 62 announced so far accounting for two-thirds of the type’s 2025 tally. The variant now holds for almost 40% of the firm backlog for A350 passenger models, which totals around 700 orders. Talk of an A350 stretch has restarted, after previously being mooted a decade ago as the “A350-2000”. A larger derivative of the R-R Trent XWB-powered twinjet, which would pitch Airbus’s biggest aircraft directly at the 777-9, could open the door to an alternative engine option. This could perhaps be an advanced derivative of the Trent, or even a solution from Cincinnati. But would GE have the appetite to support a rival to the GE9X-powered Boeing?

    Regional resurgence: ATR and Embraer announced almost 160 orders and commitments between them. US-based public charter operator JSX placed commitments with ATR for 15 firm and 10 options in a deal touted as a potential signal of a turboprop revival in the USA. But there have already been several false dawns in that regard. Meanwhile Embraer’s ongoing success with its E175 was underlined by a deal from SkyWest Airlines for up to 110 aircraft. The OEM has secured 150 orders since the start of last year for the GE CF34-powered variant and said it expected this market would “continue for many years”. But Embraer was extremely disappointed to lose out to Airbus in a crucial campaign at LOT for small single-aisles, which signed for up to 84 A220s to replace its E-Jet E1s. The Brazilian OEM hinted that “geopolitics” may have helped sway the decision away from the E-Jet E2 in Toulouse’s favour.

    Supply snags: Despite deliveries being 5% down year-on-year in the first five months of 2025 (243 vs 258), Airbus restated its intention to raise shipments this year by around 50 aircraft to at least 820 units. Commercial chief Christian Scherer pointed to “almost 40 gliders” among the A320neo family production system where aircraft have been rolled out but are awaiting powerplants – specifically CFM Leap-1As. “Were it not for those engineless aircraft our delivery performance would be slightly above plan right now,” he said. In the widebody production system, cabin-equipment supply “remains a little bit of a bottleneck”, added Scherer. Meanwhile, the OEM is gearing up to implement the take-over of former Spirit AeroSystems production sites as part of the US primary supplier’s restructuring and merger with Boeing.

  • China Aviation: Airbus & COMAC Rise, Boeing on the Back Foot

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    Yuanfei Zhao (Scott) Aviation Analyst
    Yuanfei Zhao (Scott) Aviation Analyst

    Yuanfei Zhao (Scott), Principal Aviation Analyst, Cirium Ascend Consultancy


    Ongoing geopolitical tensions between China and the United States – exacerbated by sanctions, trade tariffs, and escalating diplomatic frictions – have significantly impacted Boeing’s commercial aircraft business in China. These macro-level challenges, compounded by internal setbacks such as the prolonged 737 Max issues, have severely restricted Boeing’s ability to deliver new jets and secure fresh orders from Chinese carriers.

    Against this backdrop, 2019 marked a pivotal turning point in the Chinese aviation market: for the first time, the number of single-aisle and twin-aisle Airbus aircraft surpassed that of Boeing in the region. This lead has continued to grow in subsequent years, reflecting not only evolving commercial preferences but also broader geopolitical shifts influencing airline procurement strategies.

    Chart: Chinese airlines’ in-service and stored fleet trend

    Source: Cirium Core. Data includes in-service and stored single-aisle and twin-aisle passenger and freighter jets

    In early June 2025, reports emerged suggesting that China is preparing to place a major aircraft order with Airbus. While some sources anticipate a commitment of around 300 aircraft, others speculate the total could range between 200 and 500 units, comprising a mix of single-aisle and twin-aisle models. These developments align with an upcoming high-level diplomatic visit to China by key European leaders in July. Industry observers widely expect that a formal purchase agreement may be announced during or shortly after the visit, further reinforcing Europe’s expanding aviation partnership with China.

    If this potential order comes to fruition, it will further widen the market share gap between Airbus and Boeing in China, solidifying Airbus’s position as the leading commercial aircraft supplier in the region.

    The accompanying chart below offers a high-level overview of the evolving fleet composition and market dynamics in China, with projected market share changes based on the assumption that all on-order aircraft are delivered. It illustrates three scenarios:

    1. The current in-service and stored fleet operated by Chinese airlines;
    2. The current fleet combined with existing firm aircraft orders; and
    3. The fleet from scenario 2 plus an assumed new Airbus order of 300 single-aisle and 100 twin-aisle aircraft – an average drawn from prevailing market speculation.

    Chart: Chinese fleet share by OEM: scenarios 1, 2 and 3

    Source: Cirium Core. Data includes in-service, stored, and firm orders by airlines for single-aisle and twin-aisle passenger and freighter jets

    It is important to note that this analysis includes only firm orders placed directly by Chinese airlines, excluding those from lessors. The destination and placement of lessor-owned aircraft often fluctuate, making their inclusion uncertain. Additionally, Chinese airlines also have orders that are for unidentified customers by Airbus and Boeing, and these will be additional to this analysis.

    Lessor orders for COMAC aircraft are largely concentrated among Chinese lessors and are expected to be primarily allocated to Chinese airlines in the future. This trend suggests that COMAC’s long-term market share could increase further – alongside anticipated gains for Airbus. Consequently, Boeing’s proportional market share may continue to decline unless there are substantial improvements in its standing within the Chinese market.

    These developments highlight not only a shifting commercial landscape but also the increasingly strategic role that aviation plays in global geopolitics – where aircraft procurement decisions are shaped as much by diplomacy and international alliances as by operational needs and economic considerations.

  • Development of Yuan-Denominated Aircraft Financing Outside China

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

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    Johnny Yung
    Johnny Yung

    Johnny Yung, Senior Aviation Analyst, Cirium Ascend Consultancy


    Aircraft are capital-intensive assets and airlines typically employ a range of financing instruments, including debt issuance, finance leases, and operating leases, to fund their fleet requirements. Recently some operators have begun exploring offshore yuan-denominated financing as an alternative to the conventional US Dollar-based structures. However, adoption outside of China remains limited, with only a few carriers—such as Turkish Airlines and Korean Air—reportedly engaging in such arrangements with AVIC Leasing, CCB Leasing, ICBC Leasing and BOCOM Leasing. Broader uptake among major international airlines is expected to take time.

    What are the strategic and financial motivations behind Turkish Airlines and Korean Air adopting yuan-denominated financing?

    The interest rate associated with a specific financing arrangement is typically composed of two components: the risk-free rate and the borrower’s risk premium. While the risk premium remains consistent across different financing currencies, the risk-free rate varies depending on the loan tenor and, more critically, the benchmark rate of the chosen currency. When comparing the US Secured Overnight Financing Rate (SOFR) with the People’s Bank of China Loan Prime Rate (LPR), it becomes evident why yuan-denominated financing may offer comparatively lower interest rates.

    Chart 1: The trend of SOFR and 5-Year LPR

    Sources: FOMC, PBOC

    While yuan-denominated financing offers the advantage of lower interest costs, it also introduces potential foreign exchange risk since debt repayments are denominated in yuan, typically not the domestic currency of the airline. Airlines can mitigate this risk by generating yuan revenues.

    According to Cirium FM Traffic data, Korean Air derived approximately USD 470 million for the routes related to China in FY2024. This amount seems adequate to service the debt associated with its yuan-denominated financing for one A350 and one A321neo aircraft. As per Cirium valuations and assuming a 75% loan-to-value, the assets financing requirement here is around USD 162 million.  

    In contrast, Turkish Airlines generated an estimated USD 364 million for China-related routes in FY2024. Although this figure is relatively modest, the airline’s decision to pursue yuan financing for three A350 aircraft is part of a broader strategy to diversify funding sources across multiple currencies. In addition to yuan, Turkish Airlines has secured financing in four other currencies, underscoring its commitment to managing currency risk through diversification.

    Is there potential for increased adoption of yuan-denominated financing in the future?

    Interest rate trend

    According to the Federal Open Market Committee’s (FOMC) most recent projection released in March 2025, the Federal Funds Rate is expected to decline gradually from the current 4.25% to around 3.1% by 2027. As the cost of U.S. dollar funding trends downward, the relative appeal of yuan-denominated financing may diminish, given the narrowing differential in potential interest cost savings. However, if Chinese interest rates were to follow a similar forward trend then interest might sustain.

    China traffic recovery

    As international air traffic to and from China continues to recover, airlines are positioned to generate increased yuan-denominated revenue. The chart below illustrates the gradual restoration of capacity to China by non-Chinese carriers.

    Chart 2: Capacity to/ from China of non-Chinese carriers

    Source: Cirium Core, Schedule

    Beyond serving as a natural hedge against currency risk, the regulatory challenges associated with repatriating yuan – such as the need for official approvals – further incentivise the use of yuan-denominated financing.

    Next potential candidate?

    From a revenue composition perspective, airlines with higher ticket sales originating from China will potentially be the next candidate as it offers natural hedging and lower interest cost, for example Cathay Pacific, which has already entered the offshore yuan bond market with its debut issuance in 2021. In addition, several Middle Eastern and Southeast Asian carriers have expressed interest in exploring yuan-denominated financing, reflecting growing regional engagement with yuan-based funding solutions.

  • Business Jet Deliveries Set for 11% Growth in 2025

    Daniel Hall
    Daniel Hall

    Daniel Hall, Senior Valuation Consultant, Cirium Ascend Consultancy

    This piece follows analysis shared within our 14 May 2025 market update webinar: available to watch on-demand.

    Cirium Ascend Consultancy produces annual new delivery forecasts across the commercial, helicopter and business jet markets. In terms of new production, the helicopter and business sectors look to be entering growth mode once again, leaving supply chain woes behind us. For business jets, we believe some 8,700 new aircraft will be handed over in the following 10 years (2025-2034). This is driven by an 11% climb this year alone, driven by new types and product ramp-ups. The following analysis discusses this, and concludes with some thoughts on forecast risks.

    The below chart presents our annual forecast, split by market size segment/category.

    Chart 1: Cirium Ascend Consultancy forecast: new business jet deliveries 2025-2034

    Source: Cirium Ascend Consultancy forecast. Business turboprops not included.

    Here are some key takeaways from our latest forecast.

    Firstly, we expect new deliveries to increase by 11% this year. That is some growth, and we do admit that our forecast did not reach its target last year, owing to production strikes and a slow ramp-up of new products. But commentary from the OEMs suggests that supply chain issues are easing and with new product ramp-ups (such as Gulfstream’s G700 and Dassault’s Falcon 6X), and growth by Textron and Embraer, we feel confident that an 11% improvement will be achieved through 2025.

    Secondly, following this growth year, we forecast a flattish annual growth of approximately 1% thereafter.

    Comparing the next five years with the previous five translates to an overall 22% growth (equating to around 800 units), but almost half of this comes from the long-range category, which we forecast to grow deliveries by 31% alone.

    The light sectors are showing notably little growth over recent history. Honda’s in-development Echelon programme is a slight unknown in terms of production and market demand, but we would not expect Textron (and Embraer) to easily concede market share or units to this.

    Not only is the long-range sector contributing to growth, but it also underpins our forecast by units (29%), and value, at a notable 63% share.

    Chart 2: Forecast split by size sector: deliveries forecast by units and share

    Source: Cirium Ascend Consultancy forecast. Business Turboprops not included.

    Embraer is a growth OEM of note, and our forecast has this manufacturer moving into third position by units. Gulfstream and Dassault have notable product ramp-ups. Although the G650 will see production end this year, the Savannah-based OEM will be keen to get G700s out the door (which we forecast to be delivered at a rate of 3.5 for every G800 unit produced).

    But overall, towards the end of the 10-year period, it is clear that to unlock more production, we need labour to ease and new innovative products to enter the scene. Over 15% of the forecast will be driven by new or to-be-launched types. Delays to their development may shift our forecast to the right.

    The chart below adds our value of deliveries to the forecast. The impact of higher priced aircraft can clearly be seen in the large segment. Together, Gulfstream, Bombardier and Dassault alone are responsible for three-quarters of new delivery backlog value, in 2025 dollars at our Full-Life Base Values. Some $25 billion of business jet aircraft are expected to be delivered this year. That is quite a large financing need even in an industry where it is said that around half of new aircraft purchases are self-financed by cash.

    Chart 3: Forecast split by size sector: deliveries forecast by value and share

    Source: Cirium Ascend Consultancy forecast. Values are Full-Life Base Value. Business Turboprops not included.

    An Industry Facing Plateau or Structural Change?

    Why do we have lower forecast growth after 2025? We can look at the lack of new aircraft development after the Falcon 10X and Honda Echelon (both due in the 2027-2029 timeframe). We may have reached a development peak in terms of range, speed and cabin size, with current technology. Arguably a step change in new engine technology is needed to pivot the industry with something new. It could be said that with conventional technology, we may only see notable annual growth by other world regions taking more deliveries, particularly those underpinned by strong high net worth individual (HNWI) growth (e.g., India, China).

    Backlogs are likely to stay fairly flat through this year. The major manufacturers are currently reporting book-to-bill ratios of around 1:1 (meaning one order for each delivery). This maintains them at around two years of backlog, which we think manufacturers prefer for planning purposes. Most OEMs seem hesitant to increase production rates; of course we know some are capable of more production (based on past performance), but local labour constraints may be holding them back. Perhaps a structural change is in play, backlogs will be maintained, and we won’t move back to the days of highly competitive pricing and “white tail” risk.

    Forecast Risks, and 2025 So Far

    As of late May 2025, Q1 2025 new deliveries are 15% up on Q1 2024, which is impressive growth and looks supportive of our forecast projection. This has been driven by a range of factors, some discussed above (e.g., general product ramp-ups), but also by built and undelivered aircraft last year (G700 & Falcon 6X). Of interest were comments by Embraer that they are working to balance their delivery stream across the full year rather than their historically heavy weighting in Q4.

    There are risks, however. Tariffs have the ability to not only disrupt demand but also supply (of parts, raw materials). Many scenarios could play out, and the tariffs themselves are ever-changing. It may have been that a front-loading of deliveries helped a bump (before impacting an international transfer of an asset), but tariffs may later cause aircraft deferrals and we could see deliveries impacted in Q2 numbers.

    During the webinar, we discussed the growth of the fractional operator segment. This has undoubtedly benefitted the forecast for popular types in that segment, for instance, the Phenom 300, Citation Latitude, Challenger 3500 and Praetor series. Any curtailment of growth could impact the demand/supply balance for those models, impacting Bombardier, Cessna and Embraer. But likewise, brand loyalty is typically strong and higher-hours fractional users who want to go into full ownership are likely to stick with the same product they are used to experiencing, representing an opportunity for these OEMs.

    About Cirium Ascend Consultancy’s Business Jet Delivery Forecast

    • Our independent new delivery forecast is our opinion on business jet deliveries for the upcoming 20 years, broken down by manufacturer, type and size segment. We also provide the value of deliveries forecast.
    • The forecast can be bespoke, and go into greater levels of detail (including historical analysis, forecast methodology, commentary by size category/competitive landscape and OEM summary).
    • While the forecast above is for business jets only, we can offer services in the business turboprop marketplace.

    To request your copy of the Business Jet Delivery Forecast, enquire here.

    Cirium Ascend Consultancy is available for expert advisory, aircraft, helicopter and engine valuations, as well as market commentaries across various asset classes. We have a team consisting of both ISTAT-certified and ASA-accredited appraisers spread across the globe with offices in North America, Europe and Asia. We are also able to provide ASA appraisals conforming to USPAP standards.

  • Saab 340A and B – the Tale of Two Lifecycles

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    Eleni Maragkou, Valuations Analyst, Cirium Ascend Consultancy

    Same family, different tales. The Saab 340A and 340B, are at very different stages in their lifecycle. While the 340A is fading fast, the 340B powered by the General Electric CT7-9B engine continues to show signs of endurance in a tough regional market.  

    As of today, the in-service Saab 340 family fleet is around 160 aircraft, with approximately 180 having been retired. As shown in the graph below, the Saab 340B passenger fleet is almost evenly split between aircraft in-service and those in storage, highlighting that a sizable portion of the fleet is not in use. While the Saab 340A also has a significant portion of the fleet in storage, overall, it has a much smaller operational presence with only around 40 aircraft remaining in use. Although the proportion of retirements between the 340A and 340B are on a similar level, the 340Bs 85 retirements, are only 38% of its total fleet, however, given the large numbers of the 340B in storage, we would expect to see more of them retiring going forward.

    Figure 1. The current in service and storage fleet of Saab 340 (Fleets Analyzer, Cirium 2025)

    The Saab 340A is reaching the end of its useful life with only around ten passenger aircraft remaining in service. The challenge being there are very few CT7-5A engines left in the market. Engine shops do not prioritise that engine due to the lack of life limited parts and materials. With a limited operational future the variant is well within the sunset phase.

    But What Exactly is the “Sunset Phase”?

    For aircraft engines, it marks the final stage of an engine type’s life: declining demand, minimal parts support, higher maintenance costs, and a shrinking operator base marking the end of its commercial relevance. For the 340A, that time is the next two to three years.

    The CT7-9B engine on the other hand, remains operationally relevant, serving the Saab 340B Fleet exclusively. While the average age of the fleet for this type is 30 years old, the retirement trend for the Saab 340Bs is not yet substantial. Operators across North America and Canada continue to utilise the aircraft and the engines. The Half-Life Market Values for CT7-9B engines rose to over $600k in March 2025, with overhaul costs climbing to around $1m, driven by continued demand and availability constrains.

    Cargo conversions temporarily boosted interest in the -340B engine, though that trend has slowed according to multiple market sources. Viable conversion candidates are fewer, and some airframes require more maintenance than they are worth.

    The Verdict?

    Figure 2. A typical profile of the engine value life cycle (Cirium Ascend Methodology 2025)

    The graph in Figure 2.  shows the typical profile of the engine value life cycle,with the Saab 340A fleet reaching an average age close to 40 years old and few still in service, the CT7-5A is very much at the end of the retirement phase of the life cycle, sunsetting rapidly.

    On the other hand, the Saab 340B is still very much in the daylight, while not in the prime of its life it is far from obsolete. Considering recent value changes and fleet status of the 340B, this would place the CT7-9B in the secondary phase of the engine life cycle.

  • Advanced Air Mobility – Snapshot April 2025

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    YIRU ZHANG
    Yuri Zhang

    Yiru Zhang, Senior Valuation Analyst, Cirium Ascend Consultancy

    The Cirium Ascend Consultancy team has seen continuing dynamic developments in the advanced air mobility sector since the beginning of the year. To date, the Cirium team has registered over 11,000 order commitments for 27 different eVTOL OEMs, reflecting a continued market interest despite the hurdles.

    Data coverage includes:

    MARKET GROUPINGMANUFACTURERTYPECOMMENT
    Regional Electric – SmallAura AeroERAProgram temporarily paused
    Regional Electric – SmallHeart AerospaceES-30
    Regional Electric – SmallLYTE AviationLA-44 Skybus
    Regional Electric – SmallMaeve AerospaceMaeve 01 
    Regional Electric – SmallJektaPHA-ZE 100
    eVTOL – Urban Air MobilityAerofugiaAE200
    eVTOL – Urban Air MobilityARC Aero SystemsLinx P9 
    eVTOL – Urban Air MobilityDufour AerospaceAero3
    eVTOL – Urban Air MobilityBETA TechnologiesALIA-250
    eVTOL – Urban Air MobilityManta AircraftANN2
    eVTOL – Urban Air MobilityAscendance Flight TechnologiesAtea
    eVTOL – Urban Air MobilityOverair IncButterfly
    eVTOL – Urban Air MobilityHorizon AircraftCavorite X7
    eVTOL – Urban Air MobilityPlanaCopterPlane CP-01
    eVTOL – Urban Air MobilityWisk Aero LLCCora
    eVTOL – Urban Air MobilityTCab TechE20 eVTOL
    eVTOL – Urban Air MobilityThe ePlane Companye200XNewly added
    eVTOL – Urban Air MobilityEhangEH216
    eVTOL – Urban Air MobilityEve Air MobilityEve
    eVTOL – Urban Air MobilityCrisalion MobilityIntegrity
    eVTOL – Urban Air MobilityJaunt Air MobilityJourney
    eVTOL – Urban Air MobilityLilium GmbHLilium JetFiled for bankruptcy as of Feb 2025
    eVTOL – Urban Air MobilityArcher AviationMidnight
    eVTOL – Urban Air MobilityOdys AviationOdys eVTOL
    eVTOL – Urban Air MobilityAutoFlightProsperity 1
    eVTOL – Urban Air MobilityJoby AviationS4
    eVTOL – Urban Air MobilitySkyDriveSD-05
    eVTOL – Urban Air MobilitySirius AviationSirius Jet
    eVTOL – Urban Air MobilityXTI Aircraft CompanyTriFan 600
    eVTOL – Urban Air MobilityAMSL AeroVertiia
    eVTOL – Urban Air MobilityVolocopter GmbHVoloCityIn Insolvency proceeding as of Dec 2024
    eVTOL – Urban Air MobilityVolocopter GmbHVoloConnectIn Insolvency proceeding as of Dec 2024
    eVTOL – Urban Air MobilityEhangVT-30
    eVTOL – Urban Air MobilityVertical Aerospace Group LtdVX4
    eVTOL – UAV/UASBETA TechnologiesALIA-250c
    Business Electric – Single EngineVoltAeroCassio 330
    Business Electric – Single EngineBETA TechnologiesCX300
    Business Electric – Multi EngineEviationAlice
    Business Electric – Multi EngineBeyond AeroBYA-1Newly added
    Business Electric – Multi EngineBye AerospaceeFlyer 800
    Business Electric – Multi EngineElectraElectra eSTOL
    Business Electric – Multi EngineElectronElectron 5
    Business Electric – Multi EngineElflyNoemiNewly added
    Business Electric – Multi EngineAirflowM200
    Business Electric – Multi EngineMD AircraftMDA1 

    The eVTOL-Urban Air Mobility sector remains the most active segment of the market. The space now has a total of just under 11,000 order commitments and about 40 in-service EH216s captured by Cirium Fleets Analyzer. The drop in total order commitments was largely caused by the cancellation of over 800 Lilium Jet and 140 VX4 order commitments. Eve Air Mobility and Vertical Aerospace continue to lead the sector with 2,950 and 1,400 commitments respectively.

    Source: Cirium fleets data

    The global market for eVTOLs shows a varied regional distribution. Since surpassing North America as the region with the most orders at the end of 2024, APAC remains its leading position, with a total of 3,777 order commitments, representing a 34% share.

    Source: Cirium fleets data

    Source: Cirium fleets data

    Latest Developments in Urban Air Mobility

    • Lilium filed for insolvency for the second time: ​In February 2025, German electric air taxi developer Lilium filed for insolvency for the second time, following a series of financial setbacks. The company’s German subsidiaries had in October 2024 entered insolvency after failing to obtain essential funding, including a €50 million loan guarantee from the Bavarian government.

    In January 2025, Lilium announced a new investor in Mobile Uplift – a consortium of investors from Europe and North America – which intended to acquire the operating assets of the subsidiaries Lilium GmbH and Lilium eAircraft GmbH. However, the acquisition failed and in February 2025, Lilium again filed for insolvency.

    Lilium GmbH was founded in 2015. The aircraft, the Lilium Jet, was powered by 36 electrical motors and was intended to accommodate six passengers and one pilot. The Lilium Jet’s entry into service was scheduled for 2026. Media reports indicate that the shutdown of operations affected around 750 employees.

    • Blade’s commuter helicopter service: In January 2025, Blade introduced a new commuter service offering $95 helicopter rides from Long Island and New Jersey to Manhattan’s West Side. This reflects the growing demand for urban air transport in major metropolitan areas such as New York City. Blade currently holds 50 order commitments for Beta Technologies’ ALIA-250 and Wisk Aero’s Cora. Additionally, Blade serves as a key target operator for numerous eVTOL OEMs and has established partnerships with several of them. The expansion of Blade’s routes could also provide benefits for the future adoption and operation of eVTOL aircraft.

    Multi-Engine Business Electric

    • Electra’s EL-2 Goldfinch hybrid-electric short takeoff and landing (eSTOL)continues to lead in this sector, with total order commitments of 1,348.
    • Aura Aero recentlypushed back its targeted entry into service for its ERA design from 2028 to “before 2030”. The ERA design is a hybrid using kerosene, rather than a fully electric aircraft.
    • Heart Aerospace successfully conducted initial ground tests of its ES-30 demonstrator in 2024’s third quarter. A maiden flight is scheduled for later this year. The ES-30 order backlog now stands at 532, reflecting continued interest in regional hybrid-electric aircraft solutions.
    • In February, Eviation Aircraft paused work on its nine-passenger Alice design as it sought new investment. The company has reportedly laid off 30 employees. Eviation chief executive Andre Stein told Geekwire that the temporary pause was necessary to focus on “identifying the right long-term partnerships to help us make electric commercial regional flight a reality”, adding: “We at Eviation are proud of what we have accomplished in advancing electric flight. This decision was not made lightly.”

    Source: Cirium fleets data

    Financial and regulatory challenges persist in the AAM sector, but the industry’s commitment to achieving commercial success remains strong. The next few years will be pivotal in identifying which OEMs can effectively overcome these obstacles and establish themselves as leaders in this rapidly evolving market.

    The Cirium Ascend Consultancy AAM team will continue to provide valuable insight to the market. We would be pleased to hear any thoughts, comments or feedback you may have, so do not hesitate to contact us.

    Sara Dhariwal

    Lead Appraiser – Helicopters & AAM

    Ascend analyst Tim Chun Hing Li
    Ascend analyst Tim Chun Hing Li

    Tim Chun-hing Li

    Aviation Analyst

    YIRU ZHANG
    YIRU ZHANG

    Yuri Zhang

    Senior Valuations Analyst

    Eric Tamang
    Eric Tamang

    Eric Tamang

    Valuations Analyst