Mature & Sunset EnginesProjections & Exit Strategies
David Rushe, Director Sales & Marketing – Europe
May 2018, ELTF, London
MAGELLAN AVIATION GROUP OVERVIEW
Q2 2018 – MARKET TRENDS: THE PERFECT STORM
• Manageable Fuel Prices
• Passenger Demand
• Green time v Shop Visit
• Reliability issues (age / ADs & SBs)
• New product delays
• Enduring appeal of older assets
• Freight Market
MAGELLAN FOCUS ENGINES
Regional
PW100
CF34-3
CF34-8/10
AE3007
Narrowbody
CFM56-3
CFM56-5A
CFM56-5B/7B
V2500-A5
Widebody
PW4000-94
PW4000-112
CFM56-5C
Narrowbody
CFM56-3
CFM56-5A
CFM56-5B/7B
V2500-A5
REGIONAL ENGINES (CF34-3/PW100)
• Demand for older turboprops and
CRJs
• Diversifying Fleet
• SV Engines trading below HSV Costs
• Buoyant parts market
• Strong lease rates
• Narrow shop network
NARROWBODY ENGINES (CFM56-3/5A)
• 737 Classic P2F demand remains solid(ish)
• Shortage of Serviceable 23.5k -3C1s
• Prolonged 5A operation (Delta, Air Canada,
LH…)
• Narrow Shop network
• Inflated lease rates
• SV engine outright cost < shop visit
WIDEBODY ENGINES (PW4000/CFM56-5C)
• Shortage of Serviceable high thrust PW4000s
• Renewed 767 demand
• High volume of 5C teardowns - shortage of good engines
• Prolonged A340 demand
• Narrowing SV network
• Mature A330ceo/B777 Classic engine management strategies
• Dependent on low fuel prices
• SV Cost exceeds cost of serviceable engine (if you can find one!)
MATURE ENGINE SPARE PARTS SUPPORT
• OEMs shift support to new programmes
• Aftermarket providers engage in legacy
engine JVs
• Spike in engine teardown players
• Availability of surplus material from common
platforms
• Lease/Purchase/Exchange v Shop Visit
• Reduced SV builds
• Narrowing of shop network
PW4000 FAMILY SNAPSHOT
• Strong lease demand for high thrust models
• 747-400/777 Classics in decline. PW-powered
A330 vulnerable
• High mature SV costs exceed green-time
engines
• Declining intervals
• Parts Commonality
• 8.6% annual decline in PW4000 fleet size
(Aviation Week)
• Asia-Pacific centric operations
MATURE ENGINES – EXIT STRATEGIES
• Part-out / Consignment
• Common Platform?
• Stub-leasing market
• Secondary/tertiary operators
• Exchange
• Engine may be complicated by
OEM/MRO FHA agreements
Thank you / Go Raibh Maith Agaibh