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Power trip

From lease transactions to maintenance support, engine management is a crucial area for airlines. Keith Mwanalushi looks closer at the emerging trends in engine leasing and MRO

Low-cost carriers and start-up airlines continuously look for cost efficient and practical lease and support solutions to ensure minimum disruption and downtime. So choosing the right engine lease package requires a carefully thought out strategy.


For instance, Rolls-Royce & Partners Finance (RRPF), with DVB Bank SE (DVB) as an investment advisor, earlier this year completed a sale and lease-back transaction to finance V2500-A5 engines installed on five Airbus A320-200 aircraft.


”This was the first time that RRPF has completed such a transaction,” said Bobby Janagan, RRPF General Manager, back in January. ”It shows that we are able to develop new products to support all customers, including aircraft investors who are looking to realise the full value of assets approaching the later stages of their economic lifecycle.”


Ian Malin, Managing Director of AJW Leasing, advises airlines looking for a quick launch to keep things simple. ”We offer our own standard lease documents, or the IATA format, and we strive to finalise documentation within five business days.”


Malin recognises that creditworthiness is challenging when there is no operating history, thus protection like security deposits and shareholder guarantees are unavoidable. ”However, we have the ability to quickly assess an airline’s viability due to our comprehensive scope,” Malin continues.


 Being a full-service provider, AJW does not only support engine requirements, but also airframes. The company provides a combined engines and rotables support package that gives the airline one point of contact, while giving AJW more visibility on how the airline is performing.


”Alongside the flexible leasing solution, AJW offer engine shop visit management services. With our engineering team possessing a wealth of engine management experience, we have successfully policed many different engine platforms through the complete shop visit process,” says Malin.


In addition, AJW have designed an exchange pool for fan blades covering various engine models, including: CFM56, V2500, RB211, PW4000 and PW2000. Malin explains that the programme offers pre-identified sets of fan blades, matched pairs or singles depending on operator requirements. ”The fan blades are located at AJW’s strategic hubs around the world to support its 24/7 AOG (aircraft on ground) service. Thus, this programme ensures operators’ stocking costs and TAT are kept to a minimum, ensuring fan blades are available almost immediately,” he says.


At Willis Lease, the company sees partnering with, or sourcing support through, a full-service independent engine lessor as a very cost-effective and efficient strategy. This is due to the consistency of the products and services provided through the entire leasing cycle, whether it’s three months or three years.


”Sourcing with a full-service lessor allows airlines to leverage the lessors’ engine portfolio to manage fleet growth strategies,” states Craig Welsh, Senior Vice President and Chief Operating Officer – Americas and Asia at Willis Lease.


For example, Welsh highlights a recently signed long-term agreement with a major US carrier to supply a fixed number of engines over a variety of fixed lease terms. This was in support of their fleet growth plans and the surge in engine shop visit requirements expected over a period of time. ”As a result, it minimised the airlines’ spare engine investment over a specific timeframe, while also guaranteeing price, quality, and delivery,” explains Welsh


”The quality of the engines and its records are very important as well, because it’s not all about price. A lease that has gone wrong due to poor quality, records issues or a messy lease return can be costly in terms of aircraft downtime and extended engine lease terms. For example, the Willis Lease managed return service is geared to relieve an airline of the administrative burden of returning an engine post-lease and avoiding costly delays caused by missing parts, or non-compliant paperwork or records,” Welsh elaborates.


In the US, MRO provider AAR Aviation Services offers a mix of short and mid-term engine lease solutions to operators, including engine management solutions that offer some approaches to lease engine support.


Carl Glover, General Manager of engine solutions for AAR, says the engine group manages and supports engines for operators and lessors with solutions for spares with minimal down time, but also practical engineering and economic support based on fleet usage and asset availability alongside fleet transitions.


”There is no ‘best’ approach to cover all eventualities, but a mix of short-term leasing to cover ESVs alongside use of green time leases seems to be increasing in demand from operators of small to medium-sized fleets. LCCs with larger fleets typically opt for a more complete solution of lease support alongside their engine maintenance service providers,” says Glover.  >>

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