Airlines have traditionally maintained their own inventory of spare engines or choose to avoid the capital expenditure by relying on engine lessors. Keith Mwanalushi examines the current market for spares engines in the July edition of AviTrader MRO.
Due to the high capital value of aircraft, commercial airlines generally maintain spare engines to ensure aircraft are not grounded when engines are removed for normal maintenance, or for other reasons.
When compared to the airframe, engines require more intensive technical management and since engine overhauls are one of the largest airline operating cost segments, each overhaul must be closely managed.
When it comes to the supply and demand dynamics with older generation used spare engines, James Bennett, Director Sales and Marketing at AerFin points out that though each engine is different, there are two key factors influencing both supply and demand of older generation engines. On the demand side he says operators expect a surfeit of ‘green-time’ engines on the market as has typically been experienced, however supply is impacted by on the one hand ongoing low fuel costs. Lower fuel costs = lower fares which makes legacy equipment more attractive. “That’s having a direct impact on availability of spare engines in the market.”
Secondly, as he indicates, is the entry into service challenges of the newer engine/aircraft types – “Operators who were targeting delivery of new aircraft to replace older have been hit with significant delays which has meant prolonged operation of the planned retired fleet, again impacting the availability of spare engines hitting the market.
“Whilst we would expect both of the above conditions to change in the medium to long term it will continue to have an impact on the short-term market opportunities for operators,” Bennett notes.
Full article available here