July 17, 2012
Purchasing Finnair’s engine services operation would open up a new business line for GA Telesis, but one that fits tightly with the leasing and service provider’s overall strategy, a company executive tells Aviation Week.
“In our business, we’re focused primarily on mid-generation assets,” says Alvin Khoo, chief investment officer of Fort Lauderdale-based GA Telesis. “We own aircraft and engines and manage them. If you think about the value in aircraft as they age, the value is in the engines. So owning an engine shop is a very strategic fit for us.”
GA Telesis and Finnair last week announced that the companies are in talks that could see the airline’s Helsinki-based engine overhaul business purchased by the service provider. The deal would see GA Telesis take over “a significant portion of the existing engine shop,” says Khoo. “It will be turn-key.”
Finnair’s shop performs engine, auxiliary power unit and landing gear work for the airline and third-party customers. The airline announced in April that it would close the shop and has contracted out its own engine overhaul work.
GA Telesis would assume the engine shop and related third-party customer work only. Khoo underscores that while he is confident that the engine shop’s existing work make it sustainable, GA Telesis expects the shop to grow through deals that would leverage the company’s existing business.
“We can supply spare parts and other services related to engines and provide existing and new customers a more robust product offering,” says Khoo.
While going public with the talks suggests they are going well, both sides emphasize there is still work to be done. Finnair Aircraft Maintenance Director Janne Tarvainen says that while negotiations are “ongoing,” the airline “hope[s] to see some results in early fall this year.”