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Singapore’s Dragon Aviation Capital To Up Engine Leasing Activities

The technical asset management specialist pinpoints opportunities emanating from Asia-Pacific’s regional growth along with ambitions to expand as an independent engine lessor.

Being a relatively new player in Asia-Pacific’s booming yet increasingly crowded aviation segment, technical advisory specialist Dragon Aviation Capital (DAC) says the influx of aircraft and engines into the region will provide plenty of growth opportunities which will include increasing its engine leasing activities.

Marking its second anniversary this month in Singapore, where it currently employs a team of 15 staff including aircraft engineers and powerplant specialists, the independent company also has offices in Hong Kong and Shanghai and counts China Southern, Singapore Airlines and Lion Air among its airline clients.

Jefferson Ding, team leader - aircraft technical asset management at Dragon Aviation Capital, says its focus so far has been divided between both China and Asia-Pacific. “China-based airlines have always been the cornerstone of DAC’s plan, however our strategic focus is the bigger Asia-Pacific market as a whole,” he says.

Ding identifies opportunities in two key areas for DAC. First, with a record backlog of aircraft and engine deliveries projected for Asia-Pacific and China, he says DAC is well positioned to cater for this increased demand through its technical support offering for lessors and airlines which choose to outsource this function.

Second, he also sees potential in DAC growing as an independent engine lessor. “As a natural progression from technical support for the airlines to providing spare engine leasing, airlines view this as a seamless and critical integral support to them,” he says. He says that while the company doesn’t currently own any airframes or engines, it is planning on increasing investment in its independent leasing division where it will specialize in V2500-A5, CFM56 and CFM LEAP engines.

These growth moves however are not without challenges for an independent like DAC. “This segment is extremely competitive,” Ding says. “OEMs are entering into the aftermarket and offering innovative solution such as power by the hour. It’s a traditional stronghold where MROs has always been playing the asset manager role.”

The supply of materials for engines has also proved challenging for its material inventory solution business, where it focuses on used serviceable materials for V2500-A5 and CFM56 engines. “Due to aircraft lease return requirements and lessors commonly being required to rebuild the engine to mid-life, the aftermarket supply of life limited parts with their half life cycle remaining is dwindling and cannot meet demand,” Ding says.

Formng partnerships has also been a key part of DAC's strategy when catering for repair segments. For offerings related to APU leasing, trading and repairs in Asia-Pacific, it teamed up with Orlando, Florida-based TAG Aero earlier this year. More recently, it announced a joint venture warehouse operation at Singapore Changi Airport with Total Group International which will serve as an engine lease return center and storage location for up to four narrowbody engines. It has also linked up with Miami-based ATOPS for on-wing support services including BSI offerings worldwide.

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