Air Transport Publications
Login   |   Register
jobs Jobs
events Events
My bookmarks

Break & broker

AerFin is moving from disassembly to fleet management

In June, AerFin (UK) took delivery of the final three of 11 Airbus A340-300 aircraft (MSN 208, 218 and 217 respectively) from Cathay Pacific. This marked the end of a programme that started in March 2015, with the aircraft being delivered to the Tarmac Aerosave disassembly facility in Tarbes, south-west France. Recovered used serviceable material (USM) from four of the aircraft was consigned back to the airline to support the remaining fleet, while the rest were added to AerFin’s inventory. The CFM56-5C4 engines were shipped to AerFin’s 9,300m² facility at its base in Cardiff, UK, which manages the disassembly and storage of CFM56, Pratt & Whitney PW4000 and Rolls-Royce RB211 engines and the subsequent distribution of inventory.


This deal also marked the start of Beyond Fleet Services (see MRO Management, September 2015), a joint venture with SR Technics to reduce the costs incurred by A340 operators looking to maximise the remaining life span and revenue potential of their existing fleets. When the end is in sight, the withdrawal from service can be managed to achieve the highest possible residual value. This is achieved by offering a series of packaged services:


  • Beyond Fleet Programs, which provides fleet management of aircraft and engine components under a single programme (such as time and materials, so as not to exceed price or cost per landing)


 • Beyond Fleet Lease, an aircraft sales and lease back agreement with integrated engine and component MRO services incorporated into monthly lease rates and zero return conditions.


For airframes and components, it includes: component sale, loan and exchange services; rotable exchange pool access; repair cycle and vendor management; and inventory planning and optimisation. There is also fixed price support (power-by-the-hour) and cost per landing for wheels and brakes, and as APU support, including lease and exchange.


For engines, there are different pricing programmes (such as time and materials, not to exceed price, power-by-the-hour) and customised workscoping to achieve cost and remaining time on-wing targets.

SR Technics can carry out 90% of repairs in-house, and USM management will help to achieve significant cost savings. The company also maintains a mass of data from their significant maintenance experience with CFM56-5C4 engines, and there will be an option to incorporate PMA/DER repairs on key items as required by customers. To meet the needs of both individual customers and specific aircraft lease return conditions, replacement, repair and module exchanges will be used, as well as green-time engines for lease. Additional engine services include technical fleet management and engineering consultation from both partners.


Bob James, Managing Director of AerFin, says the project has been a success, with a further five aircraft having been acquired from other sources since then. Indeed, AerFin and SR Technics confirmed a new long term engine repair agreement in May 2017 that added CFM56-5B and CFM56-7B component coverage to the existing CFM56-5C agreement for repairs at SR Technics facilities in Zurich and Cork. An AerFin-owned CFM56-7B being held in Zurich will help support shop visit activity.


As well as the spares business, which is helped by 70% commonality with A330-200 models, he adds that there has been growth in engine leasing to airlines such as Air France, Lufthansa and Philippine Airlines.


There are around 100 A340-300s remaining in active service, some with these major carriers, as well as Aerolíneas  Argentinas, SAS, South African Airways, SWISS, TAP and Turkish, but these will inevitably join the rest in smaller fleets with smaller operators, and this is the key market for AerFin.


James comments that the deal was struck at a time when there was no foreseeable market for the aircraft, so there were few bidders. However, the company had the financial power of CarVal Investors behind it, which had acquired a majority share in December 2014.

The combination of AerFin’s technical expertise with CarVal’s ability to move quickly on a cash basis made their approach a good option for Cathay Pacific. It also helped that AerFin had previously disposed of 50 RB211 engines for the airline. >>


To download the PDF file for this article, you have to pay the amount by pressing the PayPal button below!

Filename: Break & broker.pdf
Price: £10

Contact our team for more information!


You must be logged in to post a comment.

Please login or sign up for a free account.

Disclaimer text: The views expressed in the above comments do not necessarily express the views of Air Transport Publications Ltd. or any of its publications.