Market demand for wide-body aircraft has weakened over the last year, and the backlogs for wide body aircraft are beginning to shrink as production outpaces orders. With an 11 year and counting super-cycle for commercial aircraft, cracks have begun to appear that indicate a pause is coming before an upward resumption.
The good news is that air traffic continues to rise globally, but warning signs are on the horizon. GDP growth, which is closely correlated to air traffic, appears to be falling in Asia, Europe, and the Americas from previous high levels, and could move either higher or lower, depending on trade, tariff, and monetary authority actions. While we are hopeful for continued economic resilience, we remain concerned that the first downturn in aviation in some time might occur.
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