Analysis Reports

After years of turbulence, the global airframe manufacturing sector is finally finding clearer skies in 2025 - but the climb is proving shallower than many airlines had banked on.

Airbus and Boeing have lifted deliveries to their highest level since the COVID-19 pandemic, yet persistent supply chain knots and uneven industrial recoveries mean the long-awaited surge in output remains elusive.

With just over 1,060 aircraft handed over by Oct-2025, both OEMs are gearing up for a year-end sprint to meet ambitious production targets and ease the delivery frustrations of operators hungry for capacity renewal.

Beneath the headline numbers, however, the story is one of contrasting trajectories: Airbus pressing ahead with measured ramp-ups across its narrowbody and widebody lines, and Boeing striving to stabilise its manufacturing ecosystem after years of upheaval.

Meanwhile, Embraer - often overlooked in the glare of its larger rivals - quietly posts its strongest backlog in a decade, underscoring shifting dynamics in the global supply landscape.

ASUR, one of three privatised airport operator groups in Mexico since the late 1990s, has secured a reputation for operations at its nine Mexican airports and also in other selective investments in the Caribbean region as well as in Colombia.

Now it seeks to secure "a stepping stone in its strategy in the region" by acquiring 20 mainly Brazilian airports from CPC, a subsidiary of Motiva (previously CCR), which - only a couple of years ago - seemed about to start its own expansion project for airports in Latin America, but which has since chosen to focus on surface travel infrastructure (road, rail etc.), despite the robust financial performance of its airports.

For its part, ASUR is a respected operator with impressive P&L and balance sheets. It not only runs a tight ship in Mexico, but is also a part-owner in the consortium which operates the San Juan Luis Muñoz Marín International Airport in Puerto Rico, which has witnessed a remarkable turnaround since the consortium, Aerostar, took its concession over a decade ago.

That model is just one benefit ASUR could bring to the table, but while the deal has been signed, it is not yet ratified; it remains subject to antitrust and regulatory approvals, and there could yet be an intervention by other organisations already established in the region and specifically with experience of the Brazilian market.

After another big year of growth in 2025, Cathay Pacific is planning to scale back the rate of increase in 2026 as it looks to consolidate its recent gains.

Cathay Pacific had a relatively late start to its post-pandemic recovery. However, it has been making up for lost time since then, and this year it has surpassed its network growth goals.

Next year will see growth moderating, Cathay Pacific Chief Customer and Commercial Officer Lavinia Lau said on the sidelines of the Association of Asia Pacific Airlines (AAPA) annual meeting in Bangkok on 15-Nov-2025.

The slowdown will allow the carrier to optimise and strengthen its expanded network. There will still be some growth, which will be mainly in the group's LCC subsidiary HK Express.

Like many other airlines, Cathay Pacific faces a degree of constraint on its growth due to aircraft delivery delays.

The carrier has been very busy on the order front, striking deals for more than 100 aircraft over the past two years.

But while some new narrowbodies are coming in the near term, it faces a widening gap until its next widebody aircraft are due for delivery.

The latest programme delays mean it could be up to two years before Cathay Pacific's Boeing 777-9s begin arriving.

To help bridge the gap, the carrier has embarked on major retrofit programmes in its current fleet.

While only a few airlines have re-entered the India-Mainland China market following the recent lifting of restrictions, there is significant potential for more growth between the world's two largest populations.

Direct flights between India and Mainland China stopped during the COVID-19 pandemic, and services remained suspended due to political tensions between the two countries that were exacerbated by a serious border clash in 2020.

In Oct-25 the two governments reached an agreement to reopen air links, and so far three airlines have either resumed service or announced plans to do so.

India has also reduced restrictions on visas for Chinese visitors this year.

There were seven airlines operating between India and Mainland China in late 2019, although capacity in this market was relatively low, given the size of both populations.

The number of airlines and capacity will build up again, and it is certainly possible that this market will surpass its pre-pandemic level.

While India-Mainland China capacity was dominated by Chinese airlines in 2019, Indian airlines are well positioned to increase their share of this market.

Jet2, which encompasses airline Jet2.com and tour operator Jet2holidays, will launch flights from London Gatwick Airport to 29 destinations in northern summer 2026.

Gatwick will be its 14th UK base, its third in the London area (after Stansted and Luton) and its fifth in the southern part of England (it also has bases at Bristol and Bournemouth).

With roots in the North, Jet2.com established its first base in the South of England in 2017, when it moved into Ryanair-dominated Stansted.

In spite of Ryanair's huge cost advantage, Jet2.com has continued to thrive since then, and its total passenger numbers have grown at a compound average annual rate of 13.7% pa.

Gatwick is easyJet's backyard, and the UK's biggest leisure market. EasyJet became the airport's biggest airline on the strength of its flight-only offer, but it now also has an increasingly significant holidays business.

Jet2 will not match easyJet's size at Gatwick; but as the UK's largest tour operator, it should thrive there too.

It's been a lively few years for JetBlue Airways as its two major initiatives to reach scale in the US market - a strategic alliance with American Airlines and a proposed merger with Spirit Airlines - were struck down by the US courts.

Now the airline is working through a multi-year plan to bolster revenue and slash costs that entails several initiatives, including a new partnership with United Airlines, installations of a new domestic first class, and the debut of new lounges in New York and Boston.

JetBlue is also seizing of a pull-down by Spirit Airlines in Fort Lauderdale as the ULCC restructures in Chapter 11 bankruptcy protection for the second time in less than a year.

Despite making some progress after substantial setbacks, JetBlue believes that the US government should recognise challenges that smaller airlines face in building scale in a market controlled by four dominant airlines.

The 'race' (a slow, ponderous one) has been on in India between the two main cities of Delhi, the capital, and Mumbai, the main commercial one, to build a second airport and thus to become the first Indian city to have one.

For now it looks like Mumbai is the winner as its Navi ('new') Mumbai Airport, a public-private partnership, is slated to open on 25-Dec-2025 unless Delhi somehow comes up on the rails and pips it at the post.

While airlines aren't exactly queuing up to operate there (Air India is yet to put in an appearance but Air India Express will do so) at least three airlines including IndiGo, now the largest carrier domestically, will be there from day one.

That speaks well for its prospects and the envisaged development schedule is a rapid one culminating in a 90mppa throughput and, astonishingly 50 million capacity by mid-2029.

That begs the question of which will be the main Mumbai airport in a few years time because the existing airport cannot be expanded at anything like that rate.

Moreover, IATA projects 5.6% average annual growth rate in India over the next twenty years meaning an additional 425 million annual passenger journeys expected by 2044 which would nearly triple 2024 levels while air passenger journeys per 1,000 inhabitants will rise from 148 to 258 trips.

It also sheds light on the contribution of Adani Airports, the main private sector airport operator now, which will manage both airports and which is prepared to shovel even more cash into the sector, focusing on its existing Indian airports.

Iberia is expanding in Latin America, its most important long haul market.

Its 2025 schedule includes 5.5 million seats to Latin America, its highest ever and an increase of 5% year-on-year. In the first four months of 2026, it is scheduling a further 8% growth in seats to Latin America.

This year it increased seat numbers to Argentina, its biggest Latin American market, by 19%. It currently schedules a similar growth rate in the summer of 2026.

Iberia has announced capacity growth of 25% year-on-year to Brazil in 1H2026 and is launching new services to Recife in Dec-2025 and Fortaleza in Jan-2026. In Jun-2026 it will launch a new service to Monterrey in Mexico.

Iberia is looking to defend its position as the leading airline on Europe-Latin America in the light of two developments. These are the planned new partnership between Turkish Airlines and Air Europa, Iberia's leading rival on Spain-Latin America, and the forthcoming privatisation of TAP Air Portugal, the biggest airline on Europe-Brazil.

Chinese aircraft manufacture COMAC has taken the unusual step of acquiring a 49% stake in Lao Airlines, the national carrier of Laos. The Lao Government will retain a 51% stake in the national carrier.

The deal follows announcements in 2023 that the Lao Government was seeking investors for the airline, as part broad efforts to reform and improve four major state-owned companies.

Discussion about COMAC taking an ownership stake in Lao Airlines under a JV arrangement have been ongoing since 2024, amidst deepening ties between the Chinese OEM and the airline.

In Jun-2025, it was reported COMAC had proposed a deal to acquire a minimum 51% stake the carrier, exclusive of its debts. The deal was also reportedly pending an independent audit of the carrier to determine the total value of its assets.

Local lawmakers publicly balked at any deal which would cede majority ownership of the carrier. The debt exclusion provision was also a sticking point.

The revised deal was announced on 10-Nov-2025, although the audit has yet to be completed. Lao Airlines and COMAC will now move to prepare a business development plan for the carrier, which will be submitted to the Lao Government once complete.

The German government's decision to reduce its air travel tax back to 2024 levels has been widely welcomed by the aviation industry in Germany. The annual cost saving for airlines in Germany will be an estimated EUR350 million.

The government has changed its mind on this issue more than once. The latest decision is a win for a campaign led by airlines, including Lufthansa and Ryanair, and German aviation trade bodies.

It follows high profile recent examples of European nations abolishing air passenger taxes altogether, such as Sweden and Hungary. This suggests that acceptance of the case for lowering air passenger taxes is growing across Europe.

Lower taxes ease the burden on airlines, stimulating economic growth and helping aviation to invest in the green transition.