FTAI Aviation has announced new maintenance partnerships for CFM56 engines with EgyptAir in Cairo and GMF AeroAsia in Jakarta.
In addition to test cells at both sites, FTAI hopes to benefit from established infrastructure and deep engineering talent pools in the regions.
The company’s management has told investors that its priority is to build a presence close to customers, with the new sites set to be FTAI’s first maintenance facilities east of Rome.
“We’re going to put a lot of throughput through those shops, and they will guarantee capacity,” says David Moreno, president of FTAI Aviation. “The key is getting closer to airlines in those regions and getting closer to the country.”
Through the new additions, the company is aiming to raise capacity for its module restorations from 2,000 to 3,000 per year as it seeks greater market share and new opportunities in power generation.
In the second quarter, FTAI’s revenues from its module exchange business climbed to $250 million from $165 million a year earlier.
It also wants to become a one-stop shop for customers, which has meant taking on more full performance restoration work.
At the same time, it is transitioning to an asset-light model, whereby more of its leasing operations are performed under its strategic capital initiative (SCI). About 20% of its module business is servicing SCI assets.
The SCI will also provide the company with its initial steps onto the CFM Leap platform, which FTAI Aviation expects to eventually generate a maintenance market up to three times larger than that for the CFM56 it currently specializes in.
However, despite turbulence in the Middle East and in oil markets, FTAI remains confident that airlines will continue operating older-generation engines like the CFM56 and V2500 for many years to come.
“Jet fuel has bounced around so there’s a lot of volatility, but customers have limited options to change the mix of fleet, and the economics of NGs and A320ceos are still very attractive,” FTAI Aviation CEO Joseph Adams says.
“A little to their own surprise, airlines have found they have pricing power, and they are using it,” Adams says, noting the rise in air fares. “So, we are not seeing any change in mix or fleet decisions by the end user.”
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