What's Happening?
AerFin, a parts company, in collaboration with private investment firm Turning Rock Partners, has acquired three Airbus A220 aircraft. These aircraft are slated for teardown, a process driven by the ongoing demand for Pratt & Whitney GTF engines. Initially,
the A220s will remain in operation for an interim period. Following this, AerFin will disassemble the airframes, and their engines will be transitioned to long-term lease agreements. This acquisition follows a similar deal last year where Turning Rock and AerFin purchased and tore down three A320neo airframes. Orix Aviation, which served as a transaction adviser and technical inspector on the previous A320neo deal, recently acquired AerFin in August, aiming to broaden its capabilities across the aircraft lifecycle, though Shannon Technical Services filled the technical inspector role for the recent A220 deal.
Why It's Important?
This development is significant for the U.S. aviation industry, particularly for airlines operating Airbus A220s and those reliant on Pratt & Whitney GTF engines. The teardown of relatively young aircraft to harvest parts, especially engines, indicates a persistent supply chain bottleneck and high demand for specific components. This strategy helps create new sources of used serviceable material (USM), offering operators and lessors alternatives to new parts from original equipment manufacturers (OEMs). For U.S. airlines, this could translate to improved availability of critical engine components, potentially reducing maintenance costs and lead times. It also highlights a proactive approach by parts suppliers to mitigate OEM pricing structures and lead times, fostering greater flexibility in aircraft maintenance and operations across the U.S. and global markets.
What's Next?
The acquired Airbus A220s will continue in operation for an interim period before AerFin proceeds with their disassembly. The Pratt & Whitney GTF engines from these aircraft will then be placed on long-term leases, addressing the ongoing demand for these powerplants. AerFin, now under Orix Aviation, is expected to continue its strategy of acquiring and tearing down aircraft to supply the aftermarket with used serviceable materials, particularly for in-demand engine types. This trend suggests that more relatively young aircraft might be targeted for teardown if the demand for specific components, like GTF engines, remains high and supply chain issues persist. Airlines and lessors will likely continue to explore USM as a cost-effective and timely solution for maintenance and repairs.
