Willis Lease Finance Corporation (WLFC) said it is in “advanced talks” to add an engine repair facility in Asia to capitalize on sustained growth for the company’s MRO activities.
In the first half of this year, the engine lessor’s maintenance services sales, through its current repair facilities in the U.S. and UK, climbed 38% to almost $19 million.
“We are currently in advanced discussions to establish another center in Asia,” said WLFC CEO Austin Willis on an earnings call. “The Willis Engine Repair Center, or WERC, is a replicable solution we can duplicate quickly in different geographies.”
Meanwhile, CFO Scott Flaherty noted that while intercompany MRO work is not reflected in WLFC’s income statement, it accounts for roughly a fifth of its total maintenance services revenue.
External work now includes a new contract with Pratt & Whitney for WLFC to provide storage and lease return services for GTF, PW4000 and V2500 engines from its Coconut Creek, Florida, and Bridgend, Wales facilities.
WLFC has also moved into the module exchange business following the huge success of another U.S. maintenance and leasing services provider, FTAI Aviation. Like WLFC, FTAI is also in advanced negotiations about adding maintenance capacity in Asia, in its case to existing facilities in North America and Europe.
Despite some overlap in their aftermarket businesses, the two companies have very different leasing portfolios, with FTAI focusing on the CFM International CFM56 and IAE V2500, and WLFC now having 60% of its portfolio by value in new-generation assets like the CFM International Leap, Pratt & Whitney GTF and GE Aerospace GEnx.
Willis noted during the earnings call that spare engine demand for these types should get even stronger as they enter a phase of maturity requiring overhauls and life-limited parts restorations.
However, he also underlined the ongoing strength of the leasing market for older technology like the CFM56 and V2500, adding that as these types are slowly phased out, WLFC is to benefit through its engine repair centers from growing demand for alternatives to full overhauls, such as hospital visits and module restorations.
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