Some airlines still working to increase passenger numbers for long-haul flights, are turning to narrowbody aircraft over the use of widebodies for these routes; this is to fill flight capacity and to reduce maintenance costs. The result is a positive recovery in the short-haul passenger market that is driving the demand for engines.

Rob Hall of Aircraft Commerce magazine, spoke to Wasim Akhtar, Director of Engines at AJW Group, and Anca Mihalache, VP Engine Trade and Leasing at APOC, to gain insight into the engine maintenance and leasing market, and how engine lessors are addressing challenges and bridging gaps in the market.

The article discusses the statistics around pre and post pandemic engine shop visits and notes that many airlines deferred engine shop visits during the pandemic and are now trying to book these slots with service agents. However, the vast number of engine shop visits now required is pushing a high demand for replacement engine parts and used serviceable material (USM) and due to low slot availability, there are long lead times.

There are also production delays for new aircraft, and this together with the shortage of replacement parts for certain engines, is creating a space for flexible engine-leasing solutions, and companies like AJW Group are stepping in to address the delays to assist the recovering aviation industry.

Akhtar discusses a brief history of AJW Group and their purchase of what are referred to as legacy engines, which were bought for teardown and the use of serviceable parts. He explains how the service grew and AJW Capital acquired newer assets leading to the development of the leasing arm of the Group which sees itself as a narrowbody engine lessor. He discusses the process that is followed once an engine is purchased, who is involved, what happens to the engine and its parts, the long turnaround times, and the soaring cost of teardowns since the pandemic. He comments,

‘There needs to be strategic depth and understanding of the market to know when shop visits are happening, and which parts are sought after.’

Rob Hall notes that at the height of the pandemic, 40% of narrowbody passenger fleets remained in active service. The AJW Group Director of Engines mentions that AJW Leasing readjusted and renegotiated terms for certain engines away from dry-leasing agreements to PBH-style agreements. He explains how the Group has looked at the needs of its customer base and is maintaining its agile approach to business to meet and exceed expectations through resilience and adaptability to each customer, and each engine. He discusses the different engine types and the leasing challenges and requirements for various engine types. He comments

‘There are a lot of people bidding on narrowbody engines marketed for sale. Competition is fierce and there are a lot of people who want to spend cash because they know a lot of SVs must happen over the next few years.’

Mihalache discusses green-engine leasing in more detail and how APOC deals with engine purchases, teardowns, and maintenance in the current climate and looks into the years to come.

Both Akhtar and Mihalache offer their comments on how the engine maintenance and leasing sectors will change and grow over the coming months and years, and list statistics around shop visits for various engine types, and current leasing and engine demands.