Turnaround Time

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  • Unsustainable Model
    Posted by Frank Jackman 9:20 PM on Apr 03, 2012

    It's not unusual at our MRO conferences to hear airlines lament about costs and they have a point. Often, if you talk to the airline folks, it seems as if everyone in the airline industry is making a profit -- except the airlines. Manufacturers, parts suppliers and MROs seem to secure their respective pieces of the pie, while the airlines are left scrambling to make a buck, or not to lose too many.

    Today at MRO Americas here in Dallas, I heard one of the panelists say the current business model was "not sustainable." The speaker was Bobby Janagan, general manager, engine leasing, for Rolls-Royce and Partners Finance, Ltd., and the unsustainable model related to engine leasing. Because airlines are retiring aircraft earlier and earlier, more and more surplus engines are finding their way into the engine market, either as whole engines or as affordable surplus parts.

     As my colleague Joe Anselmo reported earlier today, a 90-day engine least rate three years ago was $120k per month. Today, it's closer to $50k.

    Well, at least the airlines are happy.

    Tags: mro12, om99, tw99

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