India to drive global aviation growth: Aircraft lessor Avolon

India will be among the major countries driving global aviation growth with aircraft demand more than double the current fleet and inclusion of IndiGo in the list of investment-grade airlines, Avolon, the world’s third largest aircraft lessor, said in its 2026 forecast.

Forecasts by the Irish lessor show that China has led aviation growth in the past decade, expanding its fleet from 1,200 narrow- and wide-body aircraft in 2009 to nearly 3,300 in 2019 – an increase from 9% of the total global fleet to 16%.

“In the next decade, leadership will be passed to India, the UAE and Saudi Arabia to drive aviation growth. With a total backlog of nearly 3,000 aircraft, the aircraft ordered represent nearly double its current fleet in service and nearly 1,000 of them are scheduled for delivery in the next three years.”

The forecasts placed IndiGo among the top five airlines, with a market value of $22 billion.

The local airlines, whose current operational fleet includes 800 aircraft, have placed an order to deliver more than 1,500 aircraft in the next decade. IndiGo said it receives one aircraft per week from its order, and a similar addition to inventory is for Air India. The induction was postponed due to order backlogs and supply chain issues faced by Boeing and Airbus.

Airbus and Boeing’s order backlog now extends to more than 11 years based on 2025 production rates, Avolon noted, prompting manufacturers to ramp up production and incentivizing airlines and lessors alike to reserve their place in the queue.

“While nearly 200 airlines and lessors had reserved space at the end of the last decade, today the number is only about half that total. The top 10 airlines now hold more than half of the airline order book with Airbus and Boeing, while the top 3 lessors hold more than half of the lessor order book.”

On earnings, Avolon said the airlines are on track to post net profits of $41 billion in 2026, their fourth consecutive profitable year, which is expected to be enough to offset more than 80% of the $182 billion pandemic losses incurred in 2020-22.

Leverage is diminishing as global airline net debt has fallen by more than $100 billion since its peak in 2020. Deleveraging has led to credit upgrades, with several airlines achieving investment grade over the past year.

From just a handful in 2022, there are now dozens of investment-grade airlines, including Delta Air Lines, Southwest, IAG, Lufthansa, Etihad Airways, Qantas, Air New Zealand, Ryanair and IndiGo.

“Low fuel prices, limited fleet growth, and strong demand for air transport will enable credit upgrades for airlines globally to continue despite pockets of weakness,” it said.