What do ST Aerospace and Willis Lease Finance have in common? Engines is the easy answer. The broader--and newer--one is that both announced plans on Nov. 6 to expand their aftermarket services by getting into end-of-life activities, which reflects the burgeoning industry trend of companies--especially those related to powerplants--to seriously look at asset management across a lifecycle.
Launching Willis Aeronautical Services, which will provide end-of-life solutions for engines and the subsequent material, is a result of the engine lessor acquiring most of JT-Power's assets. In doesn't get more clear than this statement from Charles Willis, chairman and CEO: "Vertical integration at aviation leasing firms, combining aftermarket sales and trading of engine material, is becoming commonplace in our industry, as demonstrated by Lufthansa Technik's recent announced 15% investment in AeroTurbine
, an end-of-life solutions subsidiary of ILFC."
ST Aerospace's approach is a bit different. On the same day it announced that subsidiary ST Aerospace Resources signed a joint venture deal with Wings Capital Partners Holdings to set up WingStar, which will seek aircraft for lease, conversion or part out. They are particularly focusing on mid- to end-of-life Airbus A320 and Boeing 737 aircraft.
While Willis is focused on engines and ST Aero is seeking aircraft--they are both clear indications of how the MRO market is developing, in my humble opinion.