Nick Filce, on Engine Leasing & Trading

Nick Filce, Director of Trading at AerFin confirms that this growth has continued through 2022 and 2023 with activity back to pre-pandemic levels and rates, especially good quality V2500 Select Engines, CFM56-5B TI / PIP and CFM56-7B TI/E engines. “We expect this to continue due to the increase in supply chain issues affecting MRO slots and operators requiring seed engines to cover shop visits”, he says.

IBA data indicates that lease rates have nearly recovered to pre-pandemic levels for the CFM56-7B which were at US$73,000 pm in 2019 and are now at US$72,000 pm in 2023. Delays in deliveries of new generation aircraft like the Neo and MAX have led to heightened demand for current generation assets with mid-life aircraft also seeing extended operations. “The lessor community are reporting activity on airframes they were expecting to be retired and are now being extended or re-entering service”, comments Filce. He adds that the increased TAT issues faced by MROs are making it difficult to secure repair slots and putting a strain on the engines available to lease and trade – “Aircraft utilisation is returning at such a rapid rate the availability will continue to be an issue in the short to medium term”, he observes.

Filce suggests that green time engines will continue to supply the market effectively, as the availability is very strong. “Engine owners are rebuilding and repairing engines for green time, such as hospital servicing, module swaps etc. which ultimately have an impact on USM since these would have previously been torn down for their LLPs, LRUs and piece parts”. He adds that engines that were originally being torn down in-house for the components division were now being shopped for return to service – “Engine pricing for lease, sale and teardown engine candidates are increasing, which affects the cost throughout the supply chain”.

By all indications, demand for green time solutions for the V2500, CFM56-5B, and CFM56-7B engines will remain strong for the next several years. At Aero Capital Solutions (ACS) they expect sustained and robust demand for mid-life narrowbody aircraft in the mid-term, which is their area of focus and investment.