China Aircraft Leasing Group is seeking deeper ties with the aftermarket and the chance to extract more value from late-life assets.
The Hong Kong-based aircraft lessor and local MRO giant HAECO have agreed to explore the development of an engine quick-turn platform in Hong Kong, with an initial focus on quick-turn services, hospital repair and engine asset management.
Other lessors already active in these fields include FTAI Aviation and Willis Lease Finance Corp.
Willis recently said it was in “advanced talks” to add an engine repair facility in Asia to capitalize on sustained growth for the company’s MRO activities, while FTAI is planning to add facilities in Africa and Asia to those it already operates in North America and Europe.
China Aircraft Leasing Group (CALC) and HAECO, meanwhile, will also partner to optimize the utilization of used serviceable material. CALC already has a presence in this field through Harbin-based China Aviation Aftermarket, an associate company that provides aircraft recycling, component and base maintenance services.
“We are delighted to partner with HAECO to advance high value-added aviation services in Hong Kong and the wider region, enhance aircraft asset utilization and unlock new opportunities across the aviation value chain,” CALC CEO Mike Poon said in a statement.
Two days before its HAECO announcement, CALC disclosed that it was raising its residual value expectations for aircraft and engine assets from 5-15% of original cost to 5-40%.
“Management has performed a reassessment of the residual value assumptions applicable to the group’s aircraft and engines, taking into account the continued increase in aircraft market values in recent years, as supported by updated market evidence, together with actual aircraft utilization, redelivery conditions and current and expected market and business development,” it explained in an investor filing. “Based on this reassessment ... generally 5-40% of original cost would better reflect current expectations of the residual values recoverable from the aircraft and engines at the end of their useful lives.”
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