Lessor Aercap saw its lease revenues rise 74% in the third quarter on the back of its purchase of GECAS.
That acquisition made Aercap become simultaneously the world’s largest lessor of aircraft and of engines, with the latter being an important contributor to third-quarter revenue.
“We have ... the leading engine leasing franchise in the world by quite a distance, maybe by a factor of three times. And we certainly want to make sure we maintain that global leading position in the engine business as this technology matures,” said Aercap CEO Aengus Kelly on an earnings call.
In the third quarter, Aercap agreed to 23 engine lease deals, acquired 16 engines and sold 13.
Kelly noted aircraft delivery delays plus overhaul shop delays are driving strong demand for spare engines. Sometimes this is to support current-generation equipment that is having to stay in service longer than planned, and sometimes it is to compensate for ongoing teething problems with the CFM Leap and Pratt & Whitney geared turbofan (GTF).
Asked which of the new narrowbody engines was coming off wing more frequently, Kelly said both engines faced issues, but added that “the GTFs are coming off a bit faster than the CFMs at the moment.”
He also noted an important revenue stream from Shannon Engine Support, its joint venture engine maintenance facility with Safran, “which has performed well ahead of expectations.”
One might expect Aercap’s massive new presence in the engine aftermarket, combined with its unprecedented aircraft portfolio, to concern its competitors, but for now they appear to be reserving judgement.
“It is too early to say what the main impact of the change of ownership will be,” says Tom Barrett, president of engine lessor ELFC in an interview with Aviation Week's Engine Yearbook.
“Clearly, they have now assumed the mantle of the largest independent engine lessor and seem to date intent on maintaining this," says Barrett. "However, today our experience is that the management team who transferred are seeking to follow a similar strategy to the one that existed prior to GE's disposal.”
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