IRELAND Trends and Developments Contributed by: Maria McElhinney and Alice Boland, A&L Goodbody LLP
Introduction 2024 marked a significant milestone for the avia - tion industry, with global passenger demand return - ing to and surpassing pre-COVID-19 levels in many regions. The International Air Transport Association (the “IATA”) reported an 11% increase in global pas - senger demand compared to the previous year, which equated to a 6% increase compared to 2019 levels. This resurgence was driven by robust performances in the largest passenger markets of Europe and North America and a continued recovery in the Asia-Pacific region. International passenger traffic also saw a nota - ble increase and air cargo volumes rebounded after two years of decline, with full-year growth forecast at nearly 12%. As the aviation industry continued to battle with the supply demand imbalance throughout 2024, availabil - ity of financing was very strong for many of the lessors allowing for increased trading and further M&A activ - ity. Major geopolitical events in 2024 caused uncer - tainty in the global economy, albeit the aviation indus - try remains robust and is responding well to significant challenges. As the global hub for aircraft leasing, Ire - land’s important and wide-reaching role provides an insightful lens on the trends and developments within the industry. Financing trends The aviation industry in 2024 was marked by robust demand for capital, a resurgence in capital markets activity and continued innovation in financing struc - tures. These trends have continued in the first few months of 2025. Investor interest in aviation assets remains high with capital availability outstripping the supply of new aircraft. As a result, lessors and air - lines have found themselves in a competitive environ - ment for aircraft acquisition, shifting bargaining power towards lessors and driving up asset values and lease rates. US private equity continued to play a significant role, with firms such as Castlelake, Oaktree, Carlyle, PIM - CO, Apollo, KKR and Bain actively investing in leas - ing platforms and alternative lender structures. Jap - anese and Middle Eastern investors also increased their activity with notable growth in JOL and JOLCO transactions and the expansion of Middle Eastern les -
sors such as DAE and AviLease. The resilience and long-term outlook of the aviation sector has attracted both traditional and non-traditional investors, includ - ing institutional and private equity capital. There has also been a marked return of aviation issu - ers to the capital markets, particularly among invest - ment-grade lessors. Large-scale lessors such as BOC Aviation, Air Lease Corporation, AerCap and SMBC Aviation Capital issued significant volumes of unse - cured bonds, taking advantage of tightening spreads and strong investor demand. The US unsecured bond market remained the cornerstone of funding for these entities, with more than USD150 billion in lessor bonds in circulation. The aviation asset-backed securities (ABS) market also experienced a notable rebound. Seven new com - mercial aircraft ABS deals closed during 2024, with a combined value of USD4 billion, which while still below the 2019 peak, showed a clear sign of renewed investor confidence. The reopening of the ABS market was led by experienced issuers such as Carlyle Avia - tion Partners, SKY Leasing and BBAM as well as oth - ers. These transactions were characterised by tighter spreads, lower loan-to-value ratios and a focus on well-constructed portfolios. The loan ABS and collateralised loan obligation (CLO) segment also grew in popularity, offering attractive risk-return profiles and drawing in new investors. The ABS and CLO trend is one that has continued into 2025 notwithstanding geopolitical uncertainty. Warehouse financing has also remained popular, especially among non-investment grade lessors, as a means to quickly acquire assets before refinanc - ing through the capital markets. However, the cost of warehouse debt was a challenge for some, and many facilities put in place during the COVID-19 pan - demic were refinanced in the ABS market as condi - tions improved. As in recent years, the M&A trend continued through - out 2024. The competitive environment and supply constraints led to increased M&A and portfolio trad - ing activity. Large-scale portfolio acquisitions, such as Avolon’s purchase of Castlelake Aviation Limited and
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