Customized Flexible Competitive Air Finance Journal Air Finance Journal 19 September 2006 19 September 2006 , , London London Key issues in Engine Key issues in Engine Leasing: The Leasing: The Lessor Lessor ’ ’ s s perspective perspective Bruno Bruno Castola Castola , , Vice Vice - - President Sales President Sales and Marketing and Marketing , SES , SES
22
Embed
Air Finance Journal 19 September 2006,London Engines event... · · 2006-11-08Air Finance Journal 19 September 2006,London Key issues in Engine Leasing: ... • CFM56-5B4 • CFM56-5B5
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Customized
Flexible
Competitive
Air Finance JournalAir Finance Journal
19 September 200619 September 2006,, LondonLondon
Key issues in Engine Key issues in Engine Leasing: The Leasing: The LessorLessor’’ss perspectiveperspective
Bruno Bruno CastolaCastola,,ViceVice--President Sales President Sales and Marketingand Marketing, SES, SES
www.ses.ie
• A spare engine leasing company
– CFM56 only: > 180 engines
– About 100 customers worldwide
Shannon Engine Support: Who Are we?
The Spare Engine Solution
Key issues in Engine Leasing – The lessor’s perspective
• A wholly-owned subsidiary of CFM International
•We offer customized solutions - From Ad Hoc leasing per day to operating lease- The only company offering a guaranteed availability
• Pool locations on 3 continents
• Fast & easy re-delivery with a dedicated 24-hour technical support
www.ses.ie
A brief introduction:
The spare engine dilemna:
Key issues in Engine Leasing – The lessor’s perspective
A growing need for spare engine leasing
Before: the legacy airlines used to purchase spare engine as recommended by the manufacturers
Success in Aviation led to small fleet Airlines operating with no or few spare engines created a need for spare engine Lessor
Engine & Aircraft reliability + expansion of airline business (deregulation …) multiplication of airline fleet fragmentation competition cost control reduction of investment
www.ses.ie
AOGUnscheduled
removals
Acquisition costsUnderused assetsOverhead costs
A Constant Balancing Act
Spare engine investment Dilemma
From an airline’s perspective
Key issues in Engine Leasing – The lessor’s perspective
www.ses.ie
Key issues about spare engine leasing
Why is engine leasing attractive ?
What are the attractive engines?What is specific about engines leasing?
The advantages of engine leasing
Key issues in Engine Leasing – The lessor’s perspective
www.ses.ie
Why is engine leasing attractive ?
Key issues in Engine Leasing – The lessor’s perspective
Demand for aircraft is very strong• Increasing number of operators • Fragmentation of fleet from legacy carriers• Air travel booming in emerging countries • Record orders for both Boeing and Airbus narrowbodyaircraft
Traffic growing steadily• 6% in 2005/2006• to remain strong at 4.5% over the coming years
www.ses.ie
• World demand for spare engines is strong – Significant Engine Shop Visits (maintenance) growth– Increasing need for spare engines
• Airlines’ drive for cash make leasing attractive– Resulting from Airline competition– Don’t want to tie the cash in the assets
• Airlines considering less engine investment as the result of an increasing reliability
- Why investing in an under-used asset?
Key issues in Engine Leasing – The lessor’s perspective
A favourable context for spare engine leasing
www.ses.ie
What are the attractive engines?
Key issues:
• Life cycle of the Aircraft / Engine (production engine or retirement engine?)
• Operator base (number of operators, large engine production, presence worldwide)
• Interchangeability / intermix of engines (to use on a large Aircraft application range)
• High reliability (airlines are looking for trouble free engines)
• Maintainability (easy line and shop maintenance, MRO network worldwide)
Key issues in Engine Leasing – The lessor’s perspective
Easy marketing / re-marketing
www.ses.ie
All Aircraft models appear to follow a similar cycle of 3 phases
1. Production phase:typically first 15 years
2. End of production / Maturity phase: about 10 years
3. Phase out or cargo conversion:after 25 to 30 years (at about 3to 5% of total fleet/year)