India, the United Arab Emirates (UAE), and Saudi Arabia are set to lead a new phase of growth in the global aviation industry, according to Avolon’s 2026 Outlook report. The report, published on January 23, notes that new aircraft deliveries are projected to increase by 20%, reaching $120 billion by 2026. This growth is spurred by a substantial backlog of more than 3,000 aircraft orders from these nations, which is over twice their existing operational fleet.

The airline industry is forecasted to achieve global profits of $41 billion in 2026, aided by stable fuel prices and persistent economic expansion. This anticipated profit marks the fourth consecutive year for the sector, assisting airlines in recouping more than 80% of the $182 billion lost during the pandemic.

Nonetheless, the aviation industry is confronted with challenges related to a systemic shortage of aircraft, resulting in Airbus and Boeing’s order backlogs extending beyond 11 years. This situation is expected to push lease rates higher and increase the strategic significance of slots held by lessors. As noted by Jim Morrison, Avolon’s Chief Risk Officer, “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 predicts that international markets will drive growth in air travel, especially with a heightened demand for widebody aircraft. Furthermore, US low-cost carriers are anticipated to rebound by reconfiguring their fleets and networks to match consumer preferences. Despite geopolitical uncertainties and rapid advancements in artificial intelligence, the aviation sector remains robust, underpinned by solid demand and reduced fuel prices.

Looking ahead, the aviation industry is gearing up for a launch of a new commercial aircraft program in 2027, with manufacturers such as Embraer and COMAC exploring innovative concepts. This move highlights the industry’s commitment to growth and innovation amid ongoing challenges.