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IBA's Engines Explained: The Outlook

Webinars18Apr 2024

IBA's Engines Explained: The Outlook

This webinar, moderated by Mike Yeomans, and featuring Kane Ray and Jamie Davey, discusses the latest trends in the aviation engine market, highlighting the impacts of increased demand for air travel and OEM/MRO supply chain bottlenecks on aircraft engine values. Summary Much like the aircraft they power, the trend is for spare engines with existing leases to be extended due to the service extension of current-generation aircraft, increased shop visit demand, new-generation engine quality issues, and a lack of spare parts. These challenges have caused rises in market values and lease rates with IBA identifying evolving trends for supporting future rises. One of these trends is the expected demand for engine shop visits in the coming years. Lease rates have largely recovered to pre-COVID levels, with the CFM56-7B engine and the V2500-A5 engine families being notable movers. The panellists also discussed the shift in the trading market, the wide-body market, new-generation engine values, and the regional market. Speakers Mike Yeomans, Director - Valuations and Consulting, IBA Kane Ray, Head of General Aviation and Aftermarket, IBA Jamie Davey, Manager - Engines & Parts, IBA Key Takeaways Aviation Engine Demand Surge: The aviation engine market is experiencing a surge in demand due to increased air travel and the impact of COVID-19, leading to a rise in lease extensions due to a lack of engine supply. Engine Supply Shortage Factors: Factors such as increased shop visit demand, new generation engine quality issues, and a lack of spare parts in the MRO world are causing a shortage in engine supply. Increasing Market Values: Despite the challenges, market values are increasing due to the lack of supply, with even slower-to-recover segments such as the widebody market now experiencing demand, i.e. the General Electric GE90-115B powering the Boeing 777-300ER. Rising Engine Shop Visits: Engine shop visit demand is on the rise, with the narrowbody fleet expected to see further increases in the upcoming years. Recovered Lease Rates: Lease rates have recovered to pre-COVID levels for many engine variants, with engines like the CFM56-7B and the V2500-A5 seeing lease rate increases. Mature Engine Demand Increase: In both narrowbody and widebody markets, service extensions for mature aircraft have led to some significant increases in market values. This is most evident for mature engine variants with existing passenger fleets. Turboprop Engines Demand: The regional market is experiencing an increase in demand for turboprop engines, impacting market values and lease rates, with operators trying to find lift wherever possible. "The (engine) leasing market is currently experiencing a lot of lease extensions due to a lack of engine supply, particularly for current generation engines. This lack of supply is being caused by factors such as increased shop visit demand, new-generation engine quality issues, and a lack of spare parts in the MRO world. Despite these challenges, market values are increasing due to the lack of supply.” Watch On-demand Click here

6 Key Factors Affecting Aircraft Engine Values in 2024

Articles

6 Key Factors Affecting Aircraft Engine Values in 2024

In recent months, the aircraft engine market has continued to see a surge in demand for many engine types following quality issues on the newer generation engines, including the PW1100G, a focal engine in this commentary. These quality issues combined with a lack of spare engines and material for shop visit events, fuel inflated demand as we head into Q2 2024. Furthermore, all aircraft engine product families continue to face above-average cost escalations resulting in higher cost of ownership which continues to prove a challenge for those invested. As a result, IBA's engine valuations team has increased its narrowbody engine market values and identified some key market factors contributing to this.

IBA Appoints Kane Ray as Head of General Aviation and Aftermarket

News & PR09Apr

IBA Appoints Kane Ray as Head of General Aviation and Aftermarket

IBA, the leading aviation market intelligence and advisory company, has appointed Kane Ray as the new Head of General Aviation and Aftermarket. Kane brings a wealth of experience spanning over 13 years in aviation consulting, valuations, and asset management. In his new role, Kane will combine his broad technical aviation knowledge and commercial relationships to lead IBA’s General Aviation and Aftermarket appraisal services. Together with his highly experienced team and IBA’s access to cutting-edge intelligence through IBA Insight, he will be well poised to deliver accurate, unbiased valuations and advisory services across a diverse range of aviation assets. Kane’s career first started at IBA where he established himself as an expert in aircraft engine and component appraisal and consultancy services across seven years, and left as Head Analyst in 2018. He went on to work as a Senior Consultant at Counterpoint Market Intelligence from 2019 to 2021 and as Technical Manager at Kayan Aviation Capital from 2021 to 2023. Prior to his new appointment at IBA, Kane was Head Appraiser at AviationValues. He now returns to IBA with significant exposure to the aviation supply chain. Regarding his appointment, Kane commented: “The development of both IBA’s breadth of experience and product offerings since I have been away has been a remarkable pathway. Its award-winning valuation and advisory services are built from IBA’s incomparable access to quality insights and the team’s extensive expertise, making it the most dependable offering among competitors.” “It is for that reason that I commenced a career at IBA over a decade ago and why I’ve decided to rejoin the company today. The company culture and passion for aviation is something I have missed, and I am extremely glad to be back.” Of Kane’s appointment, Mike Yeomans, Director - Valuations and Consulting, commented: “Kane's leadership, technical prowess, and extensive market knowledge will be invaluable to IBA. Providing our clients with market leading expertise is at the heart of what we do, and I am thrilled to have Kane’s skills and experience to drive forward our offerings across engines, components, helicopters, general and business aviation. I speak not only for myself but also for our colleagues when I say how happy and excited I am to welcome Kane back to IBA.”

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