ST Engineering Signs JV With Temasek To Lease Freighters
Riding on the wave of demand for freighter conversions, Singapore Technologies (ST) Engineering has signed a joint venture (JV) agreement with government-backed holding company Temasek to establish a freighter leasing company.
Equally owned by both parties, the JV aims to build a portfolio valued at about $600 million within five years.
ST Engineering said the JV will be focused on the passenger-to-freighter (P2F) conversion business and is expecting to purchase passenger aircraft feedstock at lower prices as a result of the pandemic—as much as 20-34% lower year on year. The JV will finance the aircraft through a mix of equity and debt.
The Singaporean MRO provider told Aviation Daily that the portfolio value will cover around 20 to 25 aircraft, depending on the mix of narrowbodies and widebodies. The spokesperson also expects the incorporation of the company “in the coming months.”
Earlier in May, Dublin-based lessor GTLK Europe placed an order with ST Engineering for four Airbus A321P2F conversions. Three will be inducted for conversion in 2021, with the fourth conversion to be carried out in 2022.
In the 2021 first quarter, ST Engineering secured S$573 million ($425 million) worth of new commercial aviation contracts. The company said it is expecting airframe MRO to lead its recovery with a higher freighter volume, while its engine and component MRO “remains subdued.”