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Aerospace, Defense & Government Services | Industry Update Winter 2026

“Herd” on the Street
Throughout 2025, the D.A. Davidson | MCF International AD&GS team attended over thirty industry events and engaged in numerous conversations with key industry constituents across strategic and private equity acquirors. The following represents a summary of Davidson’s Bison “Herd” on the Street

Full Report

February 11, 2026,

Insights

Aerospace

Demand Pushes Aviation Asset-Backed Securities Market Toward Record Growth

Aircraft demand and growing backlogs have driven aviation asset-backed securities
(“ABS”) issuance to nearly $10 billion in 2025, representing a 67% jump compared to 2024
–The recent surge reflects strong investor confidence in aviation finance, while signaling lower funding costs for airlines amid shifting risk appetite and capital flows in aircraft leasing

A330neo: A Cost-Effective Widebody Solution

The A330neo has evolved into a highly reliable and cost-effective widebody option, with its Trent 7000 engines now achieving near 4,000-cycle reliability after early performance issues
–Offering significantly lower acquisition costs than competitors like the A350 and 787 while delivering strong range and capacity, the A330neo presents a compelling value proposition for airlines seeking efficient long-haul lifts

Airbus Extends Delivery Lead as Boeing Strengthens Widebody Orders

For December, Airbus delivered 136 planes (114 narrowbodies and 22 widebodies), while Boeing delivered 63 planes (45 narrowbodies and 18 widebodies)
Airbus’s result was driven by strong A320neo‑family handovers and steady A220 output, while Boeing’s month showed a heavier widebody mix led by 787 deliveries
Additionally, Airbus led in new orders for December with 203, dominated by the A320neo family, compared with Boeing’s 165 orders, which consisted primarily of 737 MAX aircraft
For full‑year 2025, Boeing led in gross orders with 1,167, while Airbus recorded 1,000; conversely, Airbus led full‑year deliveries with 793

Global airlines make large Boeing jet orders

In late September 2025, Turkish Airlines verbally committed to order 75 787s and completed negotiations to buy 150 737 MAX aircraft
In early September 2025, Canada’s WestJet announced an agreement with Boeing for the purchase of 60 737-10 MAX aircraft, with options for an additional 25. The order also included seven 787-9 widebody Dreamliners with options for four more
In late August 2025, Korean Air announced a $50B order for 103 Boeing airplanes (includes a mix of 787s, 777s, and 737s) with GE Aerospace engines
The Turkish Airlines and Korean Air purchases coincided with meetings between President Trump and the respective president of each airline’s country

2025 Airbus and Boeing Backlog

Global Defense

Global Defense Spending Surges Amid Geopolitical Tensions and Tech Race

Global defense spending surged in 2025 as nations reacted to escalating geopolitical
tensions and intensified competition in advanced military technologies
–Investments centered on next-generation systems, cyber capabilities, and AI-driven platforms, signaling a long-term shift toward tech-focused defense strategies
In Europe, Germany approved its 2026 defense budget, committing substantial funds to modernize its armed forces, meet NATO obligations, and strengthen capabilities through advanced technologies and equipment upgrades amid rising security challenges

European Defense Spending Surpasses Previous 2% of GDP Target

Europe’s Drive Toward Defense Self‑Reliance

The European Union (“EU”) is prioritizing domestically produced defense equipment amid supply chain disruptions, tariff concerns, and a push to reduce reliance on U.S. suppliers
–In addition to expanding domestic production, the EU is also pursuing external partnerships, including the recently announced EU–India Security & Defense Partnership

U.S. Greenlights Fighter Jet Deals with Middle East

The Trump Administration first signaled a major shift in U.S.-Saudi defense ties by considering a sale of F-35 fighter jets to Saudi Arabia after talks with Crown Prince Mohammed bin Salman
In early December, the U.S. approved a $445 million Foreign Military Sale to Bahrain for F-16 sustainment and modernization, including spare parts, support equipment, and technical assistance to boost air combat readiness and interoperability
In late December, Washington finalized an $8.6 billion deal for Israel to acquire 25 advanced F-15IA jets, with an option for 25 more, featuring cutting-edge avionics, radars, and expanded payload capacity for long-range strike and air superiority

Largest-Ever Defense Initial Public Offering (“IPO”) Completed in Europe

Czech defense manufacturer Czechoslovak Group (ENXTAM: CSG or “CSG”) completed an initial public offering on Euronext Amsterdam on January 23, 2026, raising ~$4.5 billion and achieving a ~$30 billion valuation, marking the largest defense IPO ever by funds raised
–Shares of the stock surged more than 30% on its first day of trading, signaling strong investor confidence in CSG and the broader European defense sector

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The full report, including Global, US Defense, Government Services and Space Market update as well as global M&A activity, debt and equity capital markets activity, can be downloaded at the top of the page.