Q&A: An Insider’s Take on the Future of Aviation

Global Aviation Round-Up from Aircraft Value Intelligence (AVN)

Editor’s Note: This week, John Persinos interviewed Matteo Peraldo, partner and managing director at AlixPartners, where he advises private equity firms, airlines, OEMs, suppliers, and MRO providers on value creation across the global aerospace industry. With two decades of experience spanning supply chain transformation, aftermarket strategy, and aviation M&A, Matteo helps clients navigate operational disruptions, improve performance, and execute complex transactions.

A frequent commentator in Aviation Week, FlightGlobal, and other industry media, Peraldo is widely recognized for his insights into the commercial aviation sector’s evolving economics. John’s questions are in bold.

Airlines continue to report strong demand, but supply chain bottlenecks remain stubborn. What’s the biggest misconception about the industry’s recovery in 2026?

The biggest misconception is that “recovery” means the problem is solved. Over the past five or six years, the entire ecosystem — airlines, OEMs, the larger suppliers — has targeted one thing: getting parts, at almost any cost.

What got lost is tackling cost itself. Direct material expenses have run up dramatically over that period. In some categories, like fasteners, they are two to three times pre-pandemic levels. For most players, the last across-the-board direct material cost reduction was nearly 10 years ago. That’s a whole generation of buyers who have never actually run a real cost-out exercise.

As supply chains stabilize, that’s the next battleground, and we’re already seeing the focus shift. The other misconception is that you can dust off the decade-old playbook and pick up where you left off. You can’t. The supply base, the leverage points, and the tools have all changed — we’re rewriting the playbook with clients around AI, not spreadsheets.

Here’s the uncomfortable part: the players moving now are quietly building a compounding cost advantage. The ones who wait won’t feel it right away. They’ll feel it when a competitor underprices them on a key program, or when their margins slip while everyone else’s hold. By then, the gap is structural and very hard to close.

Aircraft values have remained resilient despite high interest rates and economic uncertainty. What market signals are you watching that could change that outlook over the next 12 to 18 months?

Two, really.

First, whether the OEMs actually deliver the production ramp-up. Today’s asset values reflect a world that’s short of aircraft, so the installed base — especially the engines, the biggest bottleneck — is worth a premium. Last year’s industry profit pool analysis showed engine OEMs and lessors capturing close to 90% of the industry’s profit — they are the gatekeepers of capacity.

I’d argue values are at or near their peak on the assumption the ramp comes through, and there are encouraging signs from Boeing’s recovery on that front.

Second, passenger demand. The concerning scenario isn’t either factor alone, it’s both at once: the delivery ramp finally landing if demand were to soften at the same time. Supply catching up into a weaker market is what reprices assets. That’s the combination I’m watching.

MRO capacity is under intense pressure as airlines keep older aircraft in service longer. How do you see this reshaping the competitive landscape for independent MRO providers and aftermarket suppliers?

We’re living through what may be remembered as a golden age of MRO. “Older-for-longer” has made the aftermarket the strategic battleground, and the clearest differentiator emerging among the independents is proprietary content — PMA parts and DER repairs.

These change the economics on both sides: lower total cost of ownership for the airline or lessor, higher margin, and a defensible moat for the provider, elevating players from wrench-turners competing purely on turn time and labor rate.

Airlines and lessors were historically cautious about OEM-alternative parts, but the supply crunch forced the issue. When OEM lead times stretched, and you simply couldn’t get parts, the conservatism gave way, and adoption accelerated. That market is now genuinely unlocking.

Watch where the capital is going: TransDigm’s roughly $2.2 billion acquisition of Jet Parts Engineering and Victor Sierra Aviation Holdings earlier this year is the headline example, and it sits in a steady stream of similar deals.

The independents who win the next phase will be those with real proprietary engineering capability and the cost discipline to back it — not those simply chasing throughput.

Private equity has become increasingly active across aviation services and aerospace manufacturing. Where do you see the most attractive investment opportunities today, and which segments look overheated?

Private capital is flowing into virtually every corner of this industry right now. Transactions are happening at all-time-high multiples, but you can make a real argument that those multiples are nowhere near the ceiling.

Look at where public companies are trading and at the race to IPO: Arxis, Karman Space & Defense, and Applied Aerospace & Defense have all come to market recently, and that’s without even considering SpaceX, which sits in a valuation universe of its own.

Then look at how many segments are being repriced — or are about to be — as they start to attract infrastructure capital. The funds that own toll roads and pipelines are moving into FBOs, contracted freight, and the aftermarket, because those assets are regulated, recurring, and capacity-constrained.

As segment after segment gets valued as infrastructure rather than cyclical industrial, the whole multiple band shifts up. The most attractive opportunities sit where that re-rating hasn’t fully landed yet — for instance, the engine aftermarket and the scarce picks-and-shovels base of castings, forgings, and materials.

What looks overheated is the thin-moat asset being bid as if it already belonged in that category — a business without proprietary content or real switching costs, but priced as if it had both.

With quality aerospace assets trading at record multiples and processes more competitive than ever, what separates the sponsors who win — and actually create value — from those who don’t?

Extremely competitive M&A processes and all-time-high multiples are making many sponsors uneasy. Some respond by sitting out and waiting for a better entry point, but proprietary deals are rare now, and even complex carve-outs draw strategics and financial sponsors alike.

The private equity firms that win are the ones willing to pay up, and you only pay up if you have real conviction in the value creation — a double-digit cost improvement across SG&A, manufacturing, engineering, and footprint that you actually believe you can deliver.

Getting ready to underwrite an aggressive value-creation plan can’t be done in the few weeks at the end of due diligence. The winners begin building their operational thesis ahead of the process, sizing the upside from the outside-in so they enter with well-founded hypotheses they can validate during diligence. That lets them move with speed and lead on price.

The work pays off twice: it wins the deal, and it means that the day they own the asset, the value-creation plan is already built and ready to execute on Day One.

Looking ahead, what development in the years ahead has the greatest potential to disrupt the commercial aviation market: tariffs and trade policy, supply chain constraints, labor shortages, geopolitical tensions, or something else entirely?

I’d split that into the next year and the next decade, because they’re different stories.

Over the next year, I’m watching two structural shifts accelerate. The first is the breakup of mixed aerospace-and-industrial portfolios. The market has rendered its verdict — focused players like GE Aerospace and Howmet have dramatically outperformed their old conglomerate forms, and the pressure on the remaining diversified groups to part ways only builds. Complexity is out; focus wins.

The second is consolidation among suppliers. The fragmented base of small players that served the industry for decades is reaching its limit, and a wave of M&A, much of it driven by private equity, is assembling the scaled “mega Tier-1s” the next generation will demand.

I’d treat the usual suspects of tariffs and what were once viewed as geopolitical black swans as almost an easy bet. They are becoming all too common.

But the development that truly changes everything sits further out: the next single-aisle aircraft. It’s the real heart of this industry and will reset the competitive map for a decade or more.

The key decisions include: the engine architecture, open fan versus ducted; the fuselage materials, how far composites displace metal; and a whole new supply chain playbook built for much higher rates from day one.

I’d also keep a close eye on China. I’d be surprised if they don’t go after a piece of the next-gen narrowbody market share, this time from a far less disadvantaged position than when they launched the C919.

Thanks for your time.

John Persinos is the editor-in-chief of Aircraft Value Intelligence.

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