The aviation sector was directly impacted by the COVID-19 pandemic and the related virus containment measures. As a result of governmental travel restrictions and social isolation tactics around the world, the airlines in 2020 and early 2021 were compelled to reduce flights, ground aircraft, and temporarily cease operations. Several airlines commenced in court and out of court restructuring proceedings in 2020 and others requested rent and maintenance deferrals, which in some cases represented upwards of approximately 80% of lease revenue in some transactions. The degree to which each transaction was impacted varied depending on the amount of payment deferrals, delinquencies, airline bankruptcies, collateral performance, strength of the servicer and transaction structure.

The good news is that air travel in the United States is increasing. The TSA reported that checkpoint travel numbers for (1) July 1 increased to 2,147,090 in 2021 over 2,088,760 for 2019 and (2) July 2 increased to 2,196,411 in 2021 over 2,184,253 in 2019.