The current and future states of engine leasing

At MRO Network’s Engine Leasing Trading and Finance event in London this week, topics ranging from the growing OEM aftermarket influence to the current state of the part-out market were discussed in a series of panels comprised of industry specialists.

One of the discussions that was of particular interest to me was a talk about the current state of the engine leasing market, involving figures from the world of aviation leasing and finance.

The consensus suggested that the industry finds itself in a healthy state at present, owing much to what panel chair Jon Sharp, president and CEO of Engine Lease Finance, pinpointed as airlines becoming smarter post-2008 financial crisis and better at managing their fleet by using the leasing market to their advantage.

Nevertheless, a multitude of challenges persist with the panel identifying some of these potential obstacles, including changing demands, the influx of new engine types and increased market competition.

Dan Coulcher, SVP and chief commercial officer, EMEA of Willis Lease Finance, said new emerging challenges have led to the firm exploring new ways of growing in the market.

“Everybody’s been struggling to grow on new sale lease backs. For instance we’ve seen a lot of aggressive pricing from China so we’ve grown successfully through other ways of finding aircraft and engines.”

But what are some of the market trends and what exactly is changing?

Coulcher highlighted one prominent development from his perspective at the US-headquartered lessor. “A few years ago it looked like everything was going to go into green time and short-term but recently we’ve had a lot of long-term leases for narrowbodies which has been heartening,” he said.

Adding further to the green time topic, Cliff Topham SVP, sales and business development at Werner Aero Services, noted: “In the market there’s a demand for green time leases until the next shop visit right now, in terms of getting a rate for the month regardless of how long it flies or runs for.”

Given the often unexpected changes in the engine leasing sector have helped define it as an industry difficult to forecast, it’ll be fascinating to hear what exactly came to fruition a year from now.

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