Aviation Finance Heading Into 2026: Global Shifts and UAE Momentum

As 2025 draws to a close, the aviation finance landscape looks very different from where it stood just a year ago. Aircraft supply remains constrained, investors are returning to structured transactions, and the UAE is rapidly cementing its place as a regional aviation finance hub.

Here’s how these developments are shaping what’s next for 2026, globally and regionally.

 

Global Shift: Asset-backed Structures Regain Prominence

After several years dominated by unsecured borrowing and liquidity support, asset-backed financing is once again at the center of aviation finance.

This resurgence is driven by three key dynamics:

• Aircraft scarcity and stable values: Persistent delivery delays and supply-chain challenges have kept aircraft values high, making them strong collateral.
• Investor confidence returning: Institutional capital is flowing back into aircraft-backed securities and leases for their predictable returns.
• Focus on tangible security: Airlines’ post-pandemic balance sheets still show strain, so lenders prefer deals with asset-level protection.

 

These forces are fuelling renewed activity in finance leases, asset backed securities, JOLCOs, and export-credit supported structures.

 

Case in Point: Emirates NBD’s Landmark IndiGo Deal

One transaction that captured industry attention this year was Emirates NBD’s first aircraft finance lease facility with IndiGo, an Indian carrier, financing two Airbus A321neo aircraft.

It showcased a UAE-based lender stepping confidently into global aviation finance, deploying a structure backed by specific aircraft assets rather than corporate credit.

From a legal and transactional standpoint, the deal highlights:

• The growing cross-border role of UAE lenders in aviation.
• The importance of asset security and enforcement mechanics (including Cape Town Convention considerations).
• The convergence of regulatory systems between financing jurisdictions such as the UAE and India.

 

For aviation lawyers and financiers, this transaction perfectly illustrates the return of structured, asset-secured lending and the complex documentation and cross-jurisdiction expertise it demands.

 

UAE Outlook: From Regional Growth to Global Platform

The Middle East commercial aviation fleet is expected to grow at a rate roughly twice that of the global fleet, reflecting strong demand and ongoing fleet expansion in the region. But 2025 wasn’t just about growth—it was about positioning.

• The country’s push into advanced air mobility and eVTOL ecosystems is creating entirely new asset classes.
• Regulatory frameworks within DIFC and ADGM continue to mature, giving financiers and lessors clearer legal pathways for asset security and enforcement.
• Local banks are showing the capacity to compete internationally in structured aviation finance.

 

This combination of market scale, regulatory sophistication, and liquidity makes the UAE increasingly attractive as a global aviation finance platform, not just a regional player.

 

The Takeaway

As we move into 2026, aviation finance stands at a new equilibrium:

• Aircraft remain scarce and valuable.
• Structured, asset-backed deals are the preferred model for lenders and investors.
• The UAE has transitioned from being a key aviation market to becoming a financing center in its own right.

 

For airlines, lessors, and financiers, this means a market ripe for creative deal structures and strategic capital deployment.

For aviation lawyers, it’s a time to bridge innovation with solid legal grounding, ensuring these transactions are both commercially sound and legally enforceable.