The aerospace and defense industry is in its most active capital market period in decades.
Global M&A deal announcements surged 41% to an all-time high of 532 transactions in 2025, as new defense priorities – in the U.S. and abroad – drove demand for next-generation technologies and capabilities.
The IPO market has reopened to the industry, and private equity is playing an increasingly important role. Meanwhile, the defense sector, as reflected by the ITA ETF, returned more than 38% so far this year, far outpacing the S&P 500.
In recent years, growth in aerospace and defense has been uneven. In the post-COVID recovery, Maintenance, Repair, and Overhaul (MRO) companies, Fixed Base Operators (FBOs), and aftermarket players outperformed. At the same time, Original Equipment Manufacturers (OEMs) lagged due to production and supply chain constraints. Today, every segment of the industry is participating in the upcycle.
Amid this broad-based growth, a once unheralded corner of the aerospace industry is nonetheless managing to stand out:
Business aviation. It is increasingly attracting private equity funds, family offices, and growth equity investors seeking above-average risk-adjusted returns.
For much of its history, business aviation occupied a peculiar blind spot in institutional finance.
Wall Street focused on commercial airlines, Airbus, Boeing, and other large defense contractors, while the private jet industry was dismissed as too insignificant and too scattered for serious investors. That mindset has now shifted.
A Permanent Shift in Demand
The most significant development in business aviation over the last five years has been a major expansion in the addressable market. COVID-19 forced millions of travelers to try private aviation out of necessity – and most didn’t return to commercial flight. Once travelers experience the productivity, privacy, flexibility, and reliability of private travel, their flying preferences change permanently.
The data confirms it. Fractional ownership is the only major category showing consistent post-pandemic growth, while traditional charter and whole-aircraft ownership have modestly declined. This shift matters to investors because fractional operators generate recurring revenue, multi-year contracts, and predictable utilization patterns – exactly the kind of clear financial profile that conventional valuation methods favor.
The Infrastructure Play
For investors who prefer not to choose operator winners, business aviation offers something more stable: infrastructure-like businesses that profit regardless of which company gains market share. FBO and MRO providers, along with avionics shops, parts distributors, and software platforms, service every aircraft, regardless of ownership or deployment.
FBOs – the fuel, handling, and service facilities at airports – clearly exemplify this concept. The owner of an FBO lease at a major hub generates revenue from every landing and refueling, regardless of whether the aircraft belongs to a large business aviation company like NetJets, a Fortune 500 flight department, or a single-owner operator.
Lease terms are lengthy, switching costs are high, and so too are regulatory entry barriers – exactly the kind of infrastructure investors value most. The two leading U.S. FBO chains, Signature Aviation and Atlantic Aviation, are already supported by some of the world’s most experienced institutional investors, with enterprise values nearing or surpassing $10 billion each.
MRO businesses have a similar profile with an added element: regulatory requirements. Aircraft maintenance is not optional. Inspections, certifications, engine overhauls, and avionics upgrades are performed on fixed schedules regardless of economic conditions, making MRO revenue highly predictable and resilient.
Insulated from Geopolitics
Business aviation also represents more of a pure play on the U.S. market than commercial aerospace and aviation.
The U.S. accounts for about 60-65% of global business aviation activity, and the sector’s main operators, MROs, and FBOs are mostly domestic companies. This shields investors from currency fluctuations, trade tensions, and sanctions regimes that complicate commercial aerospace investments. During times of global uncertainty, business aviation becomes a more attractive investment.
Consolidation Upside
The pandemic-era acquisition frenzy, in which major operators rushed to buy charter companies and fleets at high prices, has ended. The landscape now features large, well-funded fractional and charter brands at the top and a scattered group of smaller operators below.
This presents a clear consolidation opportunity. The mid-market B2B charter sector, featuring operators that supplement large fractional brands, was significantly weakened during COVID. Meanwhile, the demand for these services has increased. A disciplined management team backed by growth capital could develop a scaled operation to fill this gap, with an attractive eventual exit to a major brand or financial sponsor.
At the high end, new fractional entrants are attracting receptive capital. The 2025 KKR investment in BOND – founded by veterans of previous successful fractional ventures – illustrates the demand from large investors for trusted operators, proven models, and a growing market. The major fractional providers still account for only a small share of potential demand, leaving room for more scale players targeting the ultra-high-net-worth segment.
Approaching Public Market Liquidity
Business aviation is approaching a significant milestone as large-scale public-market comparables emerge. Standard Aero’s 2024 IPO, which valued an aerospace MRO company with significant exposure to business aviation at a considerable premium, hinted at what public markets will pay for well-positioned assets. However, pure-play business aviation companies at the operator and FBO levels have not yet gone public as standalone entities.
When those listings arrive (and considering the scale achieved by Signature, Atlantic, Flexjet, and Vista, we know that time is coming), they will establish transparent public valuations and almost certainly attract additional institutional attention.
Private equity investors who establish positions now, before public price discovery, stand to benefit from the multiple re-rating that usually occurs when a sector transitions from private to public trading. This pattern is well-documented. The initial wave of public listings in a previously private sector tends to narrow private-market discounts and boost valuations for similar assets.
The Investment Playbook
The most appealing entry points today are in infrastructure and supply chain – FBOs, MROs, parts distribution, and aviation-specific software – where profit visibility is highest, and valuations remain reasonable compared to underlying cash flow.
Those with a taste for operator-level investing need to be selective. The market now favors fleet discipline, certificate efficiency, strong management, and a credible growth plan.
Business aviation has evolved from Wall Street curiosity to a genuine institutional asset class. The space is defined by durable demand growth, recurring-revenue models, infrastructure-like economics, domestic shielding from geopolitical risks, and an upcoming wave of public-liquidity events. The opportunity to establish positions while the sector still trades at a valuation discount relative to its cottage-industry history is shrinking.
Business aviation is set for takeoff.
