Jetrader

Strong Demand and Engine Constraints Reshape Aircraft Trading Market

The aircraft trading market remains active as supply constraints, rising maintenance costs and strong airline demand continue to support asset values across much of the global fleet.

During a panel discussion titled “Buying Right, Selling Smart: The Aircraft Trading Playbook” at ISTAT Americas in San Diego, held 8-10 March 2026, industry executives and valuation experts described a market where finding the right assets has become increasingly difficult even as strong demand creates opportunities for sellers.

Scarcity Drives Competition for Assets

Aircraft trading activity has increased significantly in recent years, driven in large part by production delays from aircraft and engine manufacturers. With fewer new aircraft entering service than airlines initially expected, many operators have turned to the secondary market to meet fleet needs. “Sales activity has been phenomenal,” said Michael Inglese, CEO of Aircastle.

For lessors seeking to expand their portfolios, however, the scarcity of available aircraft has made identifying attractive opportunities more challenging. “You have to look at a lot more stuff to wind up with the 50 aircraft you’re going to buy,” Inglese said.

While demand remains strong, he emphasized that disciplined asset selection remains essential. “We won’t buy something just to say we hit our investment target.”

Engines Drive Asset Value

Across the aviation asset market, panelists consistently highlighted the growing importance of engines in determining aircraft value. “A large percentage of aircraft value is the engine,” said Jeff Lewis, CEO of Hanwha Aviation.

Engine shortages, rising overhaul costs and limited maintenance capacity have strengthened the value of both engines and the aircraft they power.

Industry sentiment reflects the scale of the issue. In a poll conducted during the conference, 60% of attendees predicted that engine overhaul costs will increase between 6% and 10% annually over the next five years.

Another poll showed that 53% of participants believe rising engine maintenance costs will pose a large challenge for global airlines, while nearly half expect a similar impact on aircraft lessors.

Those pressures have reinforced the value of vertically integrated aviation platforms capable of managing engines throughout their life cycle. “Having a vertically integrated platform gives you optionality,” Lewis said. “Do I repair and sell it at a higher value? Tear it down and recycle it into the ecosystem?”

Market Values Continue to Adjust

Aircraft valuations have shifted significantly since the pandemic as supply shortages and strong travel demand have reshaped the market.

According to Lindsey Webster, senior vice president of asset valuations at mba Aviation, appraisers have had to adjust their models repeatedly to reflect rapidly changing market conditions. “From a valuation standpoint, the market has changed,” Webster said.

During the pandemic, asset values dropped sharply as airlines grounded fleets and travel demand collapsed. In the years since, however, strong recovery in passenger traffic combined with limited aircraft supply has pushed values back upward. “You’re seeing strong engine and part values,” Webster said.

Rising maintenance costs have also played a role in increasing asset values, particularly for midlife aircraft.

Debating the Market Cycle

While current conditions remain favorable for many aircraft traders, panelists offered differing views on where the industry sits in the asset cycle. Some participants believe the market may be approaching its peak. “I think we’re pretty close to the top,” Lewis said.

Others argue that strong travel demand and continued supply constraints could support asset values for longer. “I don’t think we’re at the top at all,” said David Chaimovitz, founder and CEO of Setna iO.

Chaimovitz noted that macroeconomic factors such as declining inflation and interest rate trends could help sustain strong asset values.

Freighter Conversion and Future Opportunities

Panelists also discussed opportunities in freighter conversions and other specialized segments of the secondary market. Widebody passenger aircraft nearing the end of their passenger service life often serve as feedstock for cargo conversions, though the availability of suitable aircraft has become more limited. “We really need to see a softening in that market before we can justify the business case,” Lewis said.

At the same time, strong demand for certain aircraft types continues to support trading activity. Aircastle, for example, still operates a number of widebody aircraft and has seen unexpectedly strong demand from airlines seeking lift in a constrained supply environment. “We see surprisingly good demand for the aircraft we’ve got left,” Inglese said.

Discipline Remains Critical

Despite strong market conditions, panelists emphasized that successful aircraft trading still depends on disciplined investment decisions and careful risk management. Many trading strategies involve significant uncertainty, particularly when forecasting asset values across long time horizons. “You can try to forecast cycles,” Lewis said, “but some people got very lucky.”

For investors navigating today’s market, balancing opportunity with discipline remains essential. “Everyone in my seat and similar seats is making lots of money,” Inglese said. “But you have to mitigate the tension.”

As airlines continue to seek aircraft in a constrained supply environment, the secondary market is likely to remain a critical source of fleet capacity and a central focus for aviation investors.

   

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