India, the United Arab Emirates (UAE), and Saudi Arabia are poised to spearhead the next growth phase in the global aviation sector, as highlighted in Avolon's 2026 Outlook report. The report, released on 23 January, anticipates a 20% increase in new aircraft deliveries, reaching $120 billion by 2026. This surge is driven by the combined order backlog of over 3,000 aircraft in these countries, which is more than double their current operational fleet.
The aviation industry is expected to see global airline profits soar to $41 billion in 2026, buoyed by stable fuel prices and ongoing economic growth. This marks the fourth consecutive profitable year for the sector, aiding airlines in recovering over 80% of the $182 billion lost during the pandemic.
However, the industry faces challenges due to a structural undersupply of aircraft, with Airbus and Boeing's order backlogs extending over 11 years. This shortage is likely to elevate lease rates and enhance the strategic value of lessor-held slots. Jim Morrison, Avolon's Chief Risk Officer, noted, "India, the UAE, and Saudi Arabia are emerging as the next engines of growth with order backlogs that are double their current in-service fleet."
The report also forecasts that international markets will drive air travel growth, with a significant demand for widebody aircraft. Additionally, the US low-cost carriers are expected to recover by aligning their fleets and networks with consumer trends. Despite geopolitical risks and the rapid growth of artificial intelligence, the aviation sector remains resilient, supported by strong demand and lower fuel costs.
Looking ahead, the aviation industry is preparing for a new commercial aircraft programme launch in 2027, as manufacturers like Embraer and COMAC explore new concepts. This development underscores the industry's commitment to innovation and growth in the face of ongoing challenges.
```
