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Newly launched Aero Engine Leasing (AEL) does not see the Iran war hitting demand for popular prior-generation engines, the company said.
Founded by engine parts provider and aftermarket company Aero Engine Solutions, AEL aims to have 30 engines under management by the end of the year, with its pipeline “heavily weighted” toward the CFM56.
Mark Satran, AEL managing partner, tells Aviation Week that “higher fuel prices are likely to be short-lived.” He believes that the maintenance-versus-fuel economics of CFM56 types over newer engines like the Leap and GTF will be restored “rapidly.”
He also highlights ongoing delivery challenges for new aircraft and engines.
“Simply put, we don’t see a viable alternative to the CFM56 in this market. We believe airlines will continue to show strong utilization and placement rates, regardless of short-term fuel-price volatility, keeping our portfolio resilient and in high demand.”
AEL’s pipeline currently includes CFM56-5B and -7B engine types, with numerous units already in various stages of repair and 14 serviceable engines under firm contract.
Management says that despite tight availability of CFM56s and elevated pricing, AEL’s position under the umbrella of Aero Engine Solutions gives it an advantage over other market entrants.
“Our built-in competitive advantages, derived from our longstanding strategic relationship with Aero Engine Solutions, allow us to source, acquire, and place engines far more efficiently than typical market entrants,” says Tyler Norman, another managing partner at AEL.
He says that longstanding relationships in the aftermarket will give AEL preferred access to off-lease opportunities, remarketing channels and shop slots.
“These relationships translate directly into faster turn times, better pricing power, and higher utilization rates, enabling us to thrive even when the broader market is constrained,” Norman adds.
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