Start your engines

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01 February 2005

Engine leasing is the trendy new market for banks and lessors. Alexandra Cain takes a look at the new entrants and asks the old guard what their chances of success are.

The presidents of four countries are there, as well as up to 500 journalists. Amid enormous fanfare, inspirational music and lights, four children on stilts step up to reveal... the latest aircraft engine. It's an unlikely scenario. Engines do not always generate the same battle to introduce new models, or create trans-continental trade wars as aircraft can. While no engine investor will tell you that its business is glamorous, they will say that engines are a good investment, possibly even better than aircraft. The idea of investing in engines is one that has only recently become popular. "The market has at last accepted engines as an investment and there is now sufficient proven market demand," says Jon Sharp, president and CEO of Engine Lease Finance. Provided the maintenance cycle is properly managed, engines retain great residual value. Many of the new entrants into the market need to be prepared for this, but some established...

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