The aviation market intelligence and advisory company analysis shows that engine leasing activity has grown significantly with operators now favouring lease extensions to secure lift. 

In its recent webinar on the engine market, experts from IBA, Mike Yeomans, Director – Valuations and Consulting, Kane Ray, Head of General Aviation and Aftermarket, and Jamie Davey, Manager – Engines and Parts, discussed and explained the trends.

As the industry continues to cope with supply chain issues and a shortage of spare parts and raw materials, IBA is holding firm to its view that there will be around 2,500 shop visits in 2024 for CFM56-5B, CFM56-7B, V2500-A5, CFM LEAP-1A, CFM LEAP-1B, and PW1100G engines (excluding additional shop visits driven by GTF engine issues). IBA predicts that this will be followed by a significant jump to 3,500 visits in 2025 – representing a 40 per cent increase.

However, between 2025 and 2027, the situation should come to a slight plateau at around 3,800 visits annually, before peaking at over 4,000 visits in 2028. With the continued staffing shortages in MRO facilities and OEMs facing supply chain issues and scarce shop visit slots, operators will continue to extend current engine leases to combat shop visit turnaround times and uncertainty in new generation engine reliability. 

While quality issues still plague the new generation narrowbody fleets, market values remain stable. Driven by shop visit events, the greatest market value movements can be seen in the current generation fleet. The CFM56-7B is seeing the highest market value change with an increase of around 20 per cent from 2023 to 2024. As a result of GTF groundings and growing shop visit activity, A320ceo engine values have also increased. 

As the engine market recovers, lease rates for current and new narrowbody engines have risen above pre-pandemic levels. Due to smaller supply and higher demand, V2500-A5 lease rates are slightly higher than CFM56-5B in 2024. However, CFM56-7B monthly lease rates have grown the most from about $75,000 in 2019 to $100,000 in 2024. In the new narrowbody engine leasing space, A320neo engine-related groundings have led to increases in monthly lease rates with the LEAP-1A26 climbing from a value of $110,000 in 2023 to above $125,000 in 2024.

Lease rate increases can also be attributed to the rise in engine and aircraft lease extensions as the latter contributes to reduction of spare engine supply in the market. As extensions help avoid transition costs, they have become the most cost-effective option for lessors.

While the freighter market remains strong - demand has peaked. However, ideal widebody freighter conversion candidates such as the A330-300 and 777-300ER are surging in passenger demand driven by delays to new aircraft deliveries. Despite the rising engine values for New Generation Widebody Engines, the relationship between market values and base values have steadied with changes at barely 5 per cent.

With a shortage of spare parts and long turnaround times in shops, turboprop engines have experienced heightened demand. IBA has recorded market value increases to the popular PW127M and PW150A variants, although the trend is applicable to other PW120 engine family variants. Whilst PW1500G values have been adjusted to align better with base value, GTF issues will still affect the fleet. For mature regional jet engines like the CF34-8E, market values are stable. The CF24-8E and CF34-10E engine markets have had indications of demand increases and lease rate rises as Embraer E190 family lease extensions grow and, most importantly, signal future demand for engines.  

This becomes the first GE9X customer in Africa.

“GE Aerospace is honoured to power Ethiopian Airlines’ new Boeing 777X fleet with our latest generation technology GE9X engine,” said Russell Stokes, President and CEO, Commercial Engines and Service, GE Aerospace. “Today’s order represents the next chapter in our successful partnership that has spanned decades and ensures Ethiopian Airlines continues to be at the forefront of commercial aviation.”

The 777X will be the world's largest and most efficient twin-engine jet, delivering 10% better fuel consumption, as well as the lowest emissions, and operating costs of any aircraft in its class.

Mesfin Tasew Group CEO added: "Ethiopian Airlines and GE Aerospace have a long partnership and today we are continuing that into the future with this order of GE9X engines to power our Boeing 777X fleet. This will ensure that Ethiopian Airlines fleet remains among the most efficient and modern in the world."

In line with the objective of achieving net carbon neutrality of aviation by 2050, this partnership aims to contribute to the reduction of the sector's CO2 emissions, in which Sustainable Aviation Fuels (SAF) play a key role. SAF supplied by TotalEnergies can reduce up to 90% CO2 emissions over their lifecycle compared to their fossil fuel equivalent.

The partnership will cover two main areas:

The supply by TotalEnergies of sustainable aviation fuels for more than half of Airbus’ needs in Europe.

A research and innovation programme aimed at developing 100% sustainable fuels tailored to the design of current and future aircraft. The impact of the composition of sustainable aviation fuels on the reduction of CO2 emissions and non-CO2 effects, such as contrails, will also be studied.

Airbus and TotalEnergies confirm their common ambition to promote SAF technology and to strengthen their collaboration to decarbonise the aviation industry:

TotalEnergies has been supplying the SAF used by Airbus for its aircraft deliveries in Toulouse since 2016.

TotalEnergies also supplied the fuel for several first SAF flights with Airbus aircraft:

In May 2021, the 1st long-haul flight using French-produced SAF with an A350 between Paris and Montreal;

In November 2021, the first flight of a H225 helicopter, from the "Super Puma" family, using 100% SAF;

In March 2023, the first A321neo flight with 100% SAF.

Patrick Pouyanné, chairman and chief executive officer of TotalEnergies, said: "The development of sustainable aviation fuels is at the heart of our Company's transition strategy. We are happy to form a strategic alliance with Airbus to play our part in meeting the challenge of aviation decarbonisation together. TotalEnergies has been working hard to respond to the sector’s new demand for a reduced carbon footprint. Our Company has set itself a target of 1.5 million tons of annual SAF production by 2030".

Guillaume Faury, Airbus CEO, said: "Accelerating the deployment of sustainable aviation fuels is essential if we are to meet our targets for reducing carbon emissions from aviation by 2030. This partnership between Airbus and TotalEnergies demonstrates the willingness of aerospace manufacturers and major energy producers and suppliers to work together to meet this challenge. We are determined to meet our decarbonisation targets and ensure that aviation can continue to play its valuable role for society in the future."

This will make Turkish Airlines the world’s largest operator of Trent XWB engines.

The Trent XWB-84 powered A350-900s, Trent XWB-97 powered A350-1000s and Trent XWB-97 powered A350F will be delivered between 2025 and 2033. The engines’ health and maintenance will be covered by the Rolls-Royce comprehensive TotalCare service.

Flying to more than 340 destinations in Europe, Asia, Africa and the Americas, Turkish Airlines has grown from a passenger base of 10 million in 2003 to more than 82 million in the last twelve months. 

This substantial order will complement the airline’s existing fleet, adding to the 40 Rolls-Royce Trent XWB-84 A350-900s already in service and on order, and 26 Trent 700 powered A330s.

Tufan Erginbilgic, CEO, Rolls-Royce plc, said: “Today’s announcement marks an exciting and truly historic day for Rolls-Royce. It is proof that the actions we are taking to transform Rolls-Royce into a high performing and competitive company underpinned by profitable growth are working.

“The Trent XWB is the perfect engine platform to support Turkish Airlines as it continues to grow. This order will make Turkish Airlines the largest Trent XWB operator in the world, and I would like to thank them for putting their trust in Rolls-Royce.

“Türkiye is a strategically important market for us, and it is imperative to develop long-term partnerships with the airline and other important Turkish stakeholders.

“We look forward to working with Turkish Airlines as they continue to connect their passengers across global communities and cultures.”

Ahmet Bolat, Chairman of the Board and the Executive Committee, Turkish Airlines, added: "This landmark order is more than an expansion; it's a testament to our dedication to innovation, operational excellence, and a sustainable future. The addition of these advanced Airbus aircraft to our fleet will not only enhance our operational capabilities but also significantly contribute to our environmental goals. With the unparalleled location of our home base located in Istanbul, which straddles continents, we will continue our mission of bridging people from all over the world and these new aircraft will play a crucial role for that goal in our journey towards an even brighter future."

Flown on a Boeing 787, using Rolls-Royce Trent 1000 engines, the flight marks a world first on 100% SAF by a commercial airline across the Atlantic. The milestone flight was made possible by a Virgin Atlantic-led consortium, including Boeing, Rolls-Royce, Imperial College London, University of Sheffield, ICF and Rocky Mountain Institute, in partnership with Department for Transport.

SAF has a significant role to play in the decarbonisation of long haul aviation, and pathway to Net Zero 2050.

While other technologies such as electric and hydrogen remain decades away, SAF can be used now. Today, SAF represents less than 0.1% of global jet fuel volumes and fuel standards allow for just a 50% SAF blend in commercial jet engines. Flight100 will prove that the challenge of scaling up production is one of policy and investment, and industry and government must move quickly to create a thriving UK SAF industry.

As well as proving the capabilities of SAF, Flight100 will assess how its use affects the flight’s non-carbon emissions with the support of consortium partners ICF, Rocky Mountain Institute (RMI), Imperial College London and University of Sheffield. The research will improve scientific understanding of the effects of SAF on contrails and particulates and help to implement contrail forecasts in the flight planning process. Data and research will be shared with industry, and Virgin Atlantic will continue its involvement with contrail work through RMI’s Climate Impact Task Force, which is part-funded by Virgin Unite.

The SAF used on Flight100 is a unique dual blend; 88% HEFA (Hydroprocessed Esters and Fatty Acids) supplied by AirBP and 12% SAK (Synthetic Aromatic Kerosene) supplied by Virent, a subsidiary of Marathon Petroleum Corporation. The HEFA is made from waste fats while the SAK is made from plant sugars, with the remainder of plant proteins, oil and fibres continuing into the food chain. SAK is needed in 100% SAF blends to give the fuel the required aromatics for engine function. To achieve Net Zero 2050, the innovation and investment needed across all available feedstocks and technologies must be harnessed to maximise SAF volumes as well as continuing the research and development needed to bring new zero emission aircraft to market. 

Rolls-Royce recently announced that it has proved all its in-production civil aero engine types are compatible with 100% SAF. This fulfils a commitment, made in 2021, to demonstrate there are no engine technology barriers to the use of 100% SAF.

Simon Burr, group director of engineering, technology & safety, Rolls-Royce, said: “We are incredibly proud that our Trent 1000 engines are powering the first ever widebody flight using 100% Sustainable Aviation Fuel across the Atlantic today. Rolls-Royce has recently completed compatibility testing of 100% SAF on all our in-production civil aero engine types and this is further proof that there are no engine technology barriers to the use of 100% SAF. The flight represents a major milestone for the entire aviation industry in its journey towards net zero carbon emissions.”

Sheila Remes, vice president of environmental sustainability, Boeing, said: “In 2008 Virgin Atlantic and Boeing completed the first commercial SAF test flight on a 747 and today we will accomplish yet another significant milestone utilising a 787 Dreamliner. This flight is a key step toward our commitment to deliver 100% SAF-compatible airplanes by 2030. As we work toward the civil aviation industry’s net-zero goal, today’s historic journey highlights what we can achieve together.”

Through collaborations with their key partners, the AAL team remains unwavering in its commitment to advancing helicopter performance, unlocking new possibilities, and exploring sustainable solutions through its effective partnership and collaborations.

Among AAL's long-term alliances AAL is proud to have had the following strategic partners present joint solutions at DAS 2023:

•    Thales, introducing state-of-the-art FlytX avionics suite paired with gimbal from Inpixal, a video processing solutions company
•    PBS Aerospace, a manufacturer of Auxiliary Power Units
•    PALL Corporation, featuring dust-protective device units 
•    Paramount Group, a partner in joint development and production of the of composite blades in the UAE,
•    Airborne Technologies, showcasing the plug & fly SCAR-pod,
•    Safran, bringing forward innovative gimbal solutions represented globally across multiple platforms including Mi-type helicopters.
•    W.R. Davis Engineering, highlighting an advanced infra-red suppression system

AAL not just showcased this new technology; the company efficiently installs and integrates all this high-tech equipment onto Mi-type helicopters. The range of services offered extends beyond the bounds of the exhibition stand, always tailored to meet the unique requirements of their customers.

What sets AAL apart is its deep understanding of the operators, derived not only from building unique expertise based on over 23-years of successful performance but also from the company’s role as a helicopter operator itself, largely involved in diverse missions worldwide. The wealth of experience gained from serving both commercial and government clients in challenging environments has enriched the company with valuable insights into sustainability and enhancement of the helicopter platform. This hands-on experience allows the company to continuously improve and adapt its services, tailoring them to the specific needs of different operators and the countries they represent.

Thus, AAL’s commitment to supporting the Mi-type helicopter is largely recognized and endorsed by their customers around the world. Among the strategic customers, AAL offers its services in support of UN WFP operators and has presented its capabilities at the 15th Global Humanitarian Aviation Conference & Exhibition (GHAC) held this year.

Looking ahead, the company is already laying the groundwork for further expanding its service offerings, placing a strong emphasis on understanding and addressing customer needs. The culmination of these ongoing efforts underscore AAL's steadfast commitment to excellence in the helicopter industry.

For more information, visit: AAL Group Video - YouTube

The composite blades, with technical characteristics surpassing those of legacy metal blades, offer new benefits for operators. They allow for the replacement of individual damaged blades, rather than the entire set, ensuring cost-efficiency and minimal downtime. In case of any damage, a damaged blade or set can be swiftly repaired on-site, ensuring a shorter turnaround time. 

“The integration of our advanced composite blades on AAL’s Mi helicopter is a tangible demonstration of our commitment to providing innovative solutions in the aerospace industry,” said Steve Griessel, Paramount Global CEO. “These blades represent a significant leap forward in terms of performance, durability, and cost-effectiveness.”

The agreement which was signed by Gulf Air Chief Executive Officer Captain Waleed Abdul Hameed Alalawi and Joramco’s Chief Executive Officer, Fraser Currie at the Dubai Airshow 2023, will facilitate the maintenance of Gulf Air aircraft at Joramco’s MRO facility located at Queen Alia International Airport in Jordan.

"We are thrilled to announce the extension of our decade-long strategic partnership with Joramco, a milestone that holds immense significance for us," said Captain Waleed Abdul Hameed Alalawi, Gulf Air CEO. This collaboration is a pivotal move in enhancing Gulf Air’s maintenance needs to meet the demands of our expanding fleet and the longevity of our fleet at the highest standards. Joramco’s expertise, top-notch service, and regional proximity perfectly align with our dedication to ensuring timely inspections, high-quality maintenance, and passenger safety. This partnership not only signifies an exciting chapter for both companies but also signifies our joint efforts to shape the future of aircraft maintenance and raise the bar for the aviation industry.”

“Moreover, our collaboration with Joramco is set to transform our passengers' experience by enhancing reliability, punctuality, and operational excellence. One of the significant advantages of our partnership lies in Joramco’s extensive experience and its close proximity to Bahrain. Joramco’s proximity enables swift aircraft transfers, minimising downtime and ensuring the seamless and efficient operations of Gulf Air. Together, we are poised to elevate the standards of aircraft maintenance and enhance the overall travel experience for our valued passengers," he added.

Joramco’s chief executive officer, Fraser Currie said: “We are delighted to see the development of our long-lasting partnership with Gulf Air. As part of this new agreement, Joramco will be providing heavy checks for different aircraft types from Gulf Air’s fleet for the upcoming four years. The signing of this long-term agreement reaffirms our position as a leading global MRO provider, renowned for delivering exceptional services.”