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01 October 2005

As the popularity of engine leasing increases, existing players are becoming wary of market saturation but that is good news for airlines. Andrew McGuinness reports.

Tags: Aviation  |  Jon Sharp  |  ELFC  |  Shannon Engine Support  |  Guggenheim  |  Aircraft value  |  ATA  |  aircraft lessor

At a time of continuing airline bankruptcies and falling aircraft values, engines are continuing their rise in popularity as a more secure investment for lessors.

Good asset management of maintenance cycles and costs ensure that jet engine assets retain their high value – even during a downturn.

The obvious attraction of these assets has led to an influx of new investors, including some banks, eager to take a share of this lucrative market. The growing potential for market saturation is worrying some existing independent players, but some new entrants to the market, especially banks, are keen to be involved only as financiers. The attention to detail needed to maintain the engines is only for those who are ready to make a long-term commitment as lessors.

Engine manufacturers control the majority of the engine lessor market because they have to provide this maintenance support, which can be very expensive. But independent lessors...

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