ST Aero Plans Aircraft Lease-Portfolio Expansion.jpg Nigel Howarth/AWST

ST Aero Plans Aircraft Lease-Portfolio Expansion

Focus is on mid-life narrowbodies; cross-feeding ancillary business lines.

Singapore Technologies Aerospace's (ST Aero's) Keystone Holdings leasing arm plans to add as many as 10 aircraft in the next year, targeting mid-life narrowbodies that can feed related businesses, including its MRO arm.

"We have an internal target to year-on-year increase by about 10 aircraft," says Serh Ghee Lim, ST Aero president. 

The leasing business, Keystone Holdings, added two aircraft to its portfolio last quarter, bringing its total to five. The company declined to identify the aircraft added. The three previous aircraft include two Airbus A320-family aircraft and one Boeing 737NG.

Adding leasing to its extensive portfolio is a natural fit for ST Aero. The company's cabin reconfiguration services and MRO capabilities—including CFM56 engine overhaul—are well-positioned to support leasing customers, while its freighter-conversion operation offers exit strategies for its oldest airframes.

"We are focused on midlife because we can bring to bear our competence," Lim says. "During a lease, if the lessee needs maintenance, we can do the maintenance for them, or be it airframe engine components. We don't just retire [aircraft]. We can part out the aircraft, harvest the components for our own use or we can do a passenger-to-freighter conversion."

The company's passenger-to-freighter (P2F) conversion business delivered 20 reconfigured aircraft in 2016, and is on the hunt for an A320/A321 P2F launch customer.

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