CFS: Engine USM availability still tight

[caption id="attachment_414815" align="alignright" width="550"] Panelists discussing the impact of the pandemic on the engine market.[/caption] The storage and accelerated retirement of hundreds of passenger aircraft around the world has yet to result in a significant influx of used serviceable material available for the freighter market. This is partly because owners who had bought at high prices prior to the pandemic may be holding back on selling those assets for now until the market recovers, according to panelists at Cargo Facts Symposium 2020. “COVID hasn’t washed the market full of supply of used serviceable material just yet,” said Les Cronin, senior director of marketing and sales in the Americas at MTU Aero Engines. “I think people are trying to be patient and wait this out a little longer to see if they can get at least similar returns to what they got pre-COVID.” The situation is different for widebody aircraft, for which some of the material that has been released has been snapped up quickly. This is particularly true when it comes to GE’s CF6-80C2 engine, which powers 747-400s and 767-300s, among others. “We’ve seen demand,” said Aileen Barton, marketing director of services at GE Aviation. “We’ve also seen that, even though some 747-400s with the CF6-80C2B1F have been retired, those assets have been upgraded to the higher-thrust CF6-80C2B6F to support 767 freighter service. So we haven’t necessarily seen a huge increase in the assets available.” To address increasing demand for 767-300 conversions, both Boeing and IAI have recently announced hikes in output capacity . In anticipation of a shift in demand as the eventual successor to the 767 becomes more prominent, Rolls-Royce recently strengthened its relationship with EFW on the conversion of A330s, about two-thirds of which are powered by Rolls-Royce’s Trent 700. “It’s a proactive approach to support potential and existing customers all the way,” said Jamie Sismey, marketing executive for the Americas at Rolls-Royce. “We’re at the start of the journey there so we’re still working on exactly what the details look like, but really we’re aiming for an enhanced customer experience, in a similar fashion to what we have with the airframe operators of Boeing and Airbus, for example.” With the passenger market in distress, engine manufacturers and lessors agreed on the importance of working even more closely with cargo operators. Larry Gray, director of V2500, PW2000 and PW4000 marketing at Pratt & Whitney, also said his company is in regular dialogue with conversion houses and lessors about freighter conversions of 767s, A330s and A321s. “We haven’t necessarily tied up with any of them, but we keep a working relationship with them,” he said. “And we’re always open to opportunities there.” Given the oversupply of certain engines — including the CFM56-5B and V2500 that power A321s — lease rates and purchase prices have fallen roughly in line with aircraft values. “The economics have changed now,” said Justin Phelan, vice president of marketing at Engine Lease Finance. “I think that it could be quite compelling for a lot of players, and certainly for conversion houses, to look at teaming up with lessors.”

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