ST Engineering sets up narrowbody freighter leasing JV

ST Engineering’s aviation asset management division and Singaporean state-owned investment company Temasek will establish a joint venture to purchase passenger aircraft, convert them into freighters and offer them for lease. ST told Cargo Facts that the new company will, at least initially, focus on the A320 Family of narrowbody freighters, and plans to build up a portfolio worth approximately $600 million within five years from launch. Elbe Flugzeugwerke (EFW), a joint venture between ST Engineering and Airbus, has now redelivered three A321-200P2Fs, having obtained the supplemental type certificate in 2020, and recently inducted and cut metal on the first A320-200 conversion at the ST facility in Singapore (XSP), with certification expected in the first quarter of 2022. That aircraft (2737, ex-IndiGo) is part of ST’s own asset management and leasing portfolio and arrived at XSP in February. [caption id="attachment_415715" align="alignright" width="560"] EFW has so far completed three A321P2Fs at the ST facility in Singapore. (Photo/Titan Airways)[/caption] ST told Cargo Facts that the 50-50 joint venture with Temasek, the name of which it declined to provide at this stage, will specialize exclusively in freighters, while ST’s own leasing unit has a portfolio that also contains passenger aircraft and engines. ST said it had always planned to grow its aviation asset management business, and that the pandemic presented an opportunity to expand: the demand for freighter aircraft is strong and will continue to be strong in at least the short to medium term, while narrowbody feedstock such as A320s and A321s are now available at lower prices than before. The new company will be incorporated “in the coming months,” ST said. Apart from the Temasek joint venture and EFW, ST also has a 50-50 joint venture with SJ Aviation Capital in Keystone Holdings, which in February 2020 signed a letter of intent with Qantas to convert and lease an A321P2F . At the time, ST said the A321 was already on lease to the Qantas Group and that it expected to redeliver the aircraft by the end of 2021. According to the Australian Civil Aviation Safety Authority, only one aircraft is registered to Keystone Holdings: the 2001-vintage unit 1408, currently in operation with Qantas subsidiary Jetstar. However, another Jetstar A321-200 (1195) arrived at XSP in January 2021. Neither ST nor Qantas were able to provide further clarification. Meanwhile, a 2000-vintage A321-200 (1199, ex-Ural Airlines) owned by ST also arrived at XSP in April. Titan Aviation recently added the first aircraft to its freighter leasing joint venture with Bain Capital Credit. The two partners aim to develop a portfolio with a value of around $2 billion. Cargo Facts EMEA, taking place June 2-3 as a virtual experience, is the event for exploring opportunity in the EMEA region. The event continues to bring together the best, brightest, and most innovative executives in the global air cargo industry. Learn more and register at www.cargofactsemea.com .

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