End of life solutions are increasingly evoking interest from mature fleet operators. Keith Mwanalushi finds out how SR Technics’ and AerFin’s Beyond.Fleet.Services™ responds to this challenge.

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03 Feb 2016

Still Flying High

End of life solutions are increasingly evoking interest from mature fleet operators. Keith Mwanalushi finds out how SR Technics’ and AerFin’s Beyond.Fleet.Services™ responds to this challenge.

Still flying high

End of life solutions are increasingly evoking interest from mature fleet operators. Keith Mwanalushi finds out how SR Technics’ and AerFin’s Beyond.Fleet.Services™ responds to this challenge.

In July 2015 SR Technics and AerFin announced a joint solution branded Beyond.Fleet.Services™ which is aimed at extending the life of maturing fleets. Initially the programme focused on reducing the operational costs for A340-200/300 aircraft, including engines, airframe and component maintenance, as part of a flexible and comprehensive set of end-of-life managed services.

Ensuring the economic optimisation of maturing aircraft is, as always, a critical factor to consider when airlines begin planning to introduce newer aircraft into their fleet. The A340, for instance, is an interesting aircraft but it has suffered a poor reputation as a result of high operational costs, meaning that airlines supposedly prefer the efficiency advantage of twin-engines.

Klaus-Peter Leinauer VP Sales Europe and CIS at SR Technics believes, however that the A340 has suffered a reputation for high operational cost partly due to high fuel prices at that time. But he says that “today’s operational environment has changed significantly and the feedback we now receive from airlines is that the A340 is currently, for some of them at least, the most profitable aircraft.” He maintains that this was not only a consequence of very low fuel prices, but also of the fact that in many cases the aircraft were already depreciated.

Leinauer states that “at current fuel prices, the operational costs an airline has with an Airbus A340 aircraft are now lower than with a Boing 777-200. That is also the reason why flag carriers wish to continue operating their A340 aircraft beyond 2020. Another reason,” he adds, “why the aircraft proves to be an excellent platform is the fact that used serviceable materials and engines with remaining green-time have become more and more available to help keep operating costs low.” Beyond.Fleet.Services™ can combine structured asset acquisition and disposition strategies with leasing and other service options for managing engines, airframes, components and inventory challenges. Beyond.Fleet.Services™ also provides operators with sale and leaseback opportunities for both aircraft and engines, whilst committing to purchasing aircraft at the end of its lease or working life.

Since the launch of Beyond.Fleet.Services™, Leinauer reports that the response for A340 support has been overwhelming. “AerFin and SR Technics are engaged in progressive discussions with numerous operators with sizeable A340 fleets. Announcements regarding significantly large transactions for those fleets will follow shortly, although, smaller transactions involving green-time engines for lease have already been closed for our customers.”

Leinauer also stresses that Beyond.Fleet.Services™ is not limited to the A340 platform. “The reason we started with this platform is from feedback received from our customer survey, which clearly identified the pressing need for us to develop this particular end of life solution.”

Bob James CEO AerFin adds “combining the commercial and technical expertise at AerFin plus access to significant capital through a major institutional investor with the extensive capabilities of SR Technics, Beyond.Fleet.Services™ could provide operators and owners with substantial opportunity to reduce the cost ownership whilst maximising their earnings potential with mid to end of life assets.

AerFin is already engaged in E-Jets, A320 and B737NG platforms and are looking to expand Beyond.Fleet.Services™ to include these platforms. The CFM56-5B engine would be a prime target for Beyond.Fleet.Services™ considering the introduction of the A320neo.”

“The concept of Beyond.Fleet.Services™ works for all platforms which are maturing, thus also the 737 Classics, and later on the A320ceo,” concludes Leinauer.

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