AJW logoAJW logo

24/7 AOG Critical Response

HotlinePhoneUK +44 1403 798888US +1 877 780 2008

Our award winning global AOG service is manned 24 hours a day, 365 days a year.
Please call +44 1403 798888 or email aog@ajw-group.com.

CLOSE

Delivering power | AviTrader

4 Oct 2018

The CFM56 is the most popular engine flying today. Keith Mwanalushi looks closer at the leasing market and maintenance trends for the powerplant.

Back in May, aviation consultancy firm IBA reflected on the overall stability of the engine market and flagged some strengthening market values for engines indirectly impacted by recent engine EIS issues. IBA highlighted growing awareness that some operators are extending existing leases on current engine options and this is keeping values buoyant whilst new generation technology enters the market. IBA also sees stronger short-term lease rates for the CFM56-5B/-7B due to tightening availability of supply and increased shop visits.

 

As with last year, the CFM56-5B/-7B and the V2500-A5 engines are still experiencing frequent trades and stable values with demand expected to grow as more engines are removed for maintenance. Due to the supply, demand and ease of access to credit, IBA have seen investors buying up surplus engines and parts, resulting in artificial value inflation.

 

“CFM56-5B/-7B short-term lease rates are also stronger than in the past two years, driven by shop visits and reduced availability of spare parts,” said Kane Ray, Head Analyst - Commercial Engines at IBA.

 

Delivering power | AviTrader

AJW Group is actively buying engines to meet the demand for USM from these engine variants, states Ian Malin, the Chief Investment Officer. “Admittedly, it’s presently difficult to source engines at realistic prices to satisfy the demand that is expected to increase due to a shortage of engines and material on the market,” he observes.

 

Over the past 12 months, AJW have bought several both unserviceable and serviceable -5B and -7B engines specifically to address this. The unserviceable engines go right into tear down to be sold through AJW’s Parts, Sales and Support (“PS&S”) division.

 

The serviceable engines are part of AJW Leasing’s broader strategy to establish a pipeline of product supply. AJW Leasing burns off the greentime in the engines by providing the AJW Group’s customers short term engine leasing support. “Once an engine reaches its cycle limit, it is then given to the PS&S division for disassembly and third-party sales.

 

This strategy allows the AJW group to forecast the pipeline plan around expected engine removals and be more selective in its engine purchasing,” Malin states.

 

 

Read the full article

 

 

 

In other news...

PreviousNext

17 Oct 2018

AJW appoints Frank Boni as Vice President of ...

More

16 Oct 2018

A global organisation | Asian Aviation

More

11 Oct 2018

AJW expands PBH partnership with AlMasria

More

9 Oct 2018

AJW appoints Youssef Bahsoun as Technical Ser...

More

1 Oct 2018

AJW signs PBH contract with Air Mediterranean

More

27 Sep 2018

Ellinair expands PBH contract with AJW

More

LinkedIn
Send
Cancel

Thank you for getting in touch

To ensure we give you the best experience on our website we use Cookies. You can change your cookie settings at any time. However, if you continue without changing your settings we will presume you are happy to receive all cookies on the AJW website.

Continue