S&P Global has upgraded Aircastle to BBB, up from BBB-, with a stable outlook.
The rating agency said the upgrade reflects Aircastle's “steady operating performance and growing fleet”.
The stable outlook was driven by the agency's expectation that the lessor's credit metrics will “remain largely steady” over the next 18 to 24 months, supported by demand. However, this is somewhat offset by its higher debt and interest expense associated with fleet expansion.
“Uncertainty remains around the potential impact of announced and proposed US tariffs on the aviation sector, but we think Aircastle and most other leasing peers are generally well-positioned to manage these risks,” said S&P in its report.
The agency pointed to the recent US and EU trade deal, amongst other trade deals, as positive signs for tariff exemption amongst aircraft trading deals.
“Nevertheless, if the Trump administration's proposed tariffs are fully implemented, they could weigh on global GDP growth, and ultimately on global air travel demand,” S&P added.
The agency said it expects Aircastle to continue seeing strong lease rates, with lease yields around 10% through fiscal year 2026. Additionally, the lessor's increased percentage of new technology aircraft and decreased exposure to widebody jets has supported its fleet.
