Speaker
James Pozzi
Appearances over time
3 episodes
Episodes
3
Podcasts
Quotes & moments
Rather than simply renting out hardware, lessors are investing in MRO capabilities and parts businesses to become strategic, full-service partners.
The 50% leasing milestone underscores how central lessors have become to airline balance sheets and capacity strategies.
The collapse of recent peace talks triggered a swift oil rally, driving jet fuel prices up to more than double their historical baseline.
This strict limit is driving engines off-wing earlier than expected, impacting operators' planned maintenance cycles and spare engine demand.
As an early LEAP operator, the airline is managing both legacy CFM56 and newer LEAP powerplants as it transitions fully to the Boeing 737 MAX.
The OEM-operated facilities form the core overhaul infrastructure, which is increasingly supported by third-party licensed MRO shops.
The carrier's shutdown has suddenly introduced dozens of mid-life A320 airframes into the secondary leasing and part-out ecosystem.
The network includes top-tier providers Lufthansa Technik, Air France Industries KLM E&M, Standard Aero, ST Engineering, and Delta TechOps.
Based in Madrid, Iberia Maintenance will perform full performance restorations on LEAP engines from day one starting in Q1 2027.
Engine lease rates for current-generation equipment are starting to soften a bit from historic peaks. While still exceptionally strong, rates are responding to incremental shifts in airline demand and fleet capacity.
Modern lessors are becoming integrated strategic partners for airlines, actively buying aftermarket businesses to build risk-sharing maintenance models. Today, securing asset access is as valuable as outright ownership.
The high-profile failure of Spirit Airlines in the US is releasing classic V2500 engines onto the market. This supply influx could test the leasing dynamics for older narrowbodies like the A320 classic.
Commercial aviation aftermarket activity remains resilient despite the ongoing Middle East conflict. Major engine suppliers expect any tangible financial or statistical downturn to lag by quarters, possibly holding off until 2027.
Analysts have shifted from predicting a short-term disruption to bracing for a structural problem lasting through the year. Airlines face a toxic combination of elevated financing costs, expensive jet fuel, and depressed discretionary travel demand.
Following the rejection of recent peace plans, jet fuel prices soared to a range of $150 to $200. This massive jump from historical averages of $85 to $90 is causing carriers to cancel routes and scramble for margin protection.
Faced with expensive fuel, airlines will selectively park their older, less efficient aircraft and prioritize modern fleets. This shift could quickly flood the market with used serviceable material (USM), reshaping the aftermarket engine backlog.
The LEAP operates at much higher temperatures than the legacy CFM56, causing pronounced teething issues like the reverse bleed system defect and a 10,000-cycle limit on high-pressure turbine blades. It will take time to iron out these humps in the road.
Current high spare engine ratios reflect temporary technical disruptions, not long-term structural demand. Once durability issues are solved, the industry risks an oversupply of spare engines, which could cause lessor lease rents to collapse.
MRO shops are transitioning from simple offloads to complex, independent repairs. AFI KLM is ramping up combustor repairs and developing capability for high-pressure turbine discs and compressor discharge seals to meet critical aftermarket demands.
Airbus and Boeing are struggling to meet ambitious narrowbody production rates due to key supplier constraints, particularly from engine manufacturers CFM and Pratt & Whitney, meaning they would welcome any spare capacity.
The CFM LEAP has grown at an unprecedented rate, reaching in 9 years the delivery volume that took the legacy CFM56 three decades to achieve. This year, LEAP deliveries will officially surpass those of its highly relied-upon predecessor.
Despite the massive scale of the new LEAP fleet, the mature CFM56 will still account for 26,000 engine overhauls over the next decade, outperforming the newer engine program in sheer shop visit volume because of its maturity.
Independent shops are stepping up to expand capacity. SR Technics is expected to offer independent third-party overhaul services for the LEAP-1A by early next year, transitioning from their current offload arrangement.
Aviation Week projects 24,000 new CFM LEAP deliveries over the next decade. By 2035, the active in-service LEAP fleet is anticipated to reach up to 33,000 engines, driving massive downstream maintenance demands.
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