Fleet evolution in aviation is a gradual, albeit inevitable, process and owners of aero engines are in a peculiar spot at this point in history. On the one hand, unforeseeable market dynamics are forcing them to fly their assets longer than they originally intended, while on the other hand, they have to equip their operations for the decades to come.
The introduction of new generation engines in the mid-2010s also rang in a technological shift for airlines, which have been and continue to rely on workhorse engines like the CFM56, V2500 or CF6. Recent examples of this include Vietjet’s announcement of the purchase of 400 LEAP-1B engines, which are slated to replace its aging CFM56 fleet. Another current example is from a large northern European carrier looking to retire part of its A320 fleet and find a way to capitalize on almost three dozen V2500 engines. The question begs, how can asset owners manage replacing potentially hundreds of aging engines and maximize their residual value during the sunset years?
The answer is, they don’t have to – or at least not alone. There is help at hand. During the same period as OEMs started delivering the first batches of new generation engines, MTU Maintenance, the leading global provider for tailor-made engine maintenance, repair and overhaul (MRO) services, enhanced its service provisions by introducing its MTUPlus Intelligent Solutions. These aim at delivering the best options for engine operators and owners looking to optimize utilization, maintenance costs and phase-out of engines, regardless of the age of the assets. Owners with aging fleets are increasingly focusing on retiring their assets. And with the VALUEPlus solution, MTU is well equipped to help them develop the optimal exit strategy. Its experts maximize residual value, making the switch to new generation engines as smooth as possible.
MTU Maintenance Lease Services B.V., which was established as MTU’s additional arm with an asset management and leasing focus, uses all the tools in the VALUEPlus solution so that asset owners can optimize engine usage and cushion the financial costs of technological upgrades.
VALUEPlus offers a number of ways to get the most out of a mature or sunset engine, including remarketing and green-time lease-outs to third parties. These options can generate the owner extra revenue until a mandatory shop visit or retirement. In the case of retirement, MTU can then tear the engine down within its network, repair the parts that still have life in them and remarket them on consignment, generating further additional income. Thanks to its integrated approach to MRO, leasing and asset management, MTU’s asset managers are experts in finding the right solution for customers and their very specific requirements. The easiest solution, of course, is to sell the engine to MTU and focus entirely on the new fleet.
The key to the future is how to manage the present. And for airlines and other engine owners, the rest of the decade will be crucial how they set up the progression to new generation engines. It is no secret that engines make up the largest portion of value on an aging aircraft and the potential to incur unnecessary losses from mismanagement have increased, as well. With MTU Maintenance’s support, this pitfall can easily be avoided – thanks to its network and expertise in the management of aging engines.
