The current peak in air travel and a decrease in engine retirements have led to a surge in demand for green-time engines, hence the higher lease rates, according to experts at Kellstrom Aerospace.
Michael Garcia, vice president of commercial at Kellstrom, observes that demand has reached unprecedented levels. With the delivery schedules for new engines delayed, the industry is likely to face significant challenges in maintaining operational effectiveness.
Kellstrom is working with MROs such as Vortex Aviation to develop green-time assets that effectively address the needs of passenger and freighter markets. “I think there is sufficient availability of green time engines to support the market, but this support will come at a premium price,” says Garcia.
Due to increased demand and constrained supply chains, operators will need to invest more to secure these essential assets. Garcia believes the premium pricing reflects the market dynamics, where the urgency to meet both passenger and cargo transport needs intensifies the competition for available engines.
“While the market can be supported, [with green time engines] it will require strategic planning and financial flexibility from operators to navigate this period of high demand and limited supply,” says Garcia.
Meanwhile, the International Airlines Technical Pool (IATP) is offering its newly launched engine pooling service as a short-term lease dedicated to unscheduled engine removal. The service was launched in March to support airlines, especially given the ongoing lack of engine availability.
IATP tells Aviation Week Network the pooling offering will cover many of the popular current generation engines—including the CFM International CFM56-5B and -7B, IAE V2500, and General Electric CF6-80C2, CF34-8E/8C/10E and GE90—as well as relevant engine stands.
The IATP pool aims to ship an engine within 24 hr. of the initial request. For a monthly engine participation fee, members can benefit from guaranteed availability.
Repair capacity is the biggest challenge many MROs face in terms of ensuring engine availability. To keep up, the IATP pool relies on the engine provider and its network of MRO facilities and partners to navigate those challenges. According to IATP, this gives the pool significant added value in terms of flexibility to store engines worldwide, closer to the user.
By the end of the year, IATP plans to induct CFM International Leap 1Bs into the pool. It does not expect engine reliability issues to cause availability problems, as the 1B variants do not face the same kinds of technical issues as the 1As.
The OEMs are addressing the challenges with new engines, but the relentless demand for aircraft lift, combined with delays in new engine deliveries, is driving lease rates higher.
“Consequently, these increased costs are likely to be passed on to consumers,” notes Garcia. “This situation underscores the importance of robust supply chain management and strategic planning to mitigate the impact on both operators and end-users,” he adds.
Although engine availability remains constrained due to fewer retirements, Garcia reports that proactive communication and planning with customers have proven to be a successful strategy.
“This approach allows us to effectively manage the challenges and continue delivering reliable solutions in a demanding market,” he says.
