Global Avionics Round-Up from Aircraft Value News (AVN)
Forget fuel hedges and production backlogs. The next major re-rating of aircraft values and lease rates will not come from engines or wings. It will come from software. Over the past two years a technical shift has been building momentum.
Aircraft with modular, software defined avionics architectures and modern flight management systems are becoming easier and cheaper to upgrade, easier to certify across jurisdictions, and more valuable to operators who want data, efficiency, and regulatory resilience.
For lessors, financiers, OEMs, and appraisers, this is under-reported today but poised to accelerate in 2026 into a clear pricing axis for the global fleet.
Avionics are moving from fixed, hardware-bound boxes to modular, software-defined systems that can be updated, patched, and functionally extended without replacing avionics racks.
That movement toward modular open systems architectures and software-defined avionics is already measurable in market forecasts and industry coverage. The global avionics sector is expanding sharply as connectivity and digital services become part of aircraft economics.
Airframers and suppliers are responding with partnerships and products. Funded cooperation between OEMs and embedded software firms is becoming routine.
In mid-2025, Airbus signed a letter of intent with an embedded software specialist aimed at accelerating avionics software development. That kind of deal is exactly the kind of upstream consolidation that makes software-first architectures credible at scale.
A Valuation Premium
There are three linked economic mechanisms that make software-defined avionics a value driver.
First, upgradability lowers retrofit cost and time out of service. Instead of needing a shop visit to swap circuit cards, there is a software patch or an over-the-air configuration update. That reduces downtime and total cost of ownership.
Second, modular architectures enable interoperability across fleets and better commonality between types. A lessor with mixed A320neo and A321neo aircraft can market the same avionics baseline to more lessees with smaller transition friction.
Third, modern avionics unlock operational savings and new revenue streams through better flight planning, more precise navigation, fuel economy improvements, predictive maintenance, and data services.
Those quantifiable savings are the rationale that underwriters and lessors will use to justify higher base values and premium lease rates. Aviation trade analysis this year already links next generation FMS and avionics suites with demonstrable value uplifts.
Who Pays and Why Now
Historically, airlines paid for avionics upgrades only when necessary for compliance or route requirements. That calculus is shifting. Airlines now see avionics as a platform for operational performance and ancillary revenue.
Lessors are learning to price that into base values because the pool of potential operators for an aircraft depends on how easily that aircraft plugs into modern operational systems.
Financiers see lower residual risk when an aircraft can receive security and software updates that keep it certified and marketable across regions without major hardware change.
External forces will accelerate adoption in 2026. Regulators are tightening expectations around software change management and cybersecurity. The combination of clearer regulatory pathways and OEM-backed software roadmaps reduces certification friction that might otherwise stall value recognition.
At the same time the avionics supplier market is scaling, making module-level upgrades cheaper and faster than past avionics retrofits. Those cost and certification improvements are the catalysts that will make 2026 the year lessors begin to price software-upgradability as a line item in appraisals and lease schedules.
The strongest, fastest premiums will show up in high-volume narrowbodies and newer regional types where the delta between legacy and software-enabled avionics is largest and the secondary market is deepest.
This article originally appeared in Aircraft Value News.
John Persinos is the editor-in-chief of Aircraft Value News.