01 Mar 2023

Ishka+ Originals | Engine investors' guide: New-tech engine teething issues

Dickon Harris, Editor at Ishka Insights is joined by Richard Hough, Chief Operating Officer at Engine Lease Finance Corporation to discuss an overview of engine leasing for investors and new-tech engine teething issues ahead of our Investing in Aviation: Europe Event. To hear about similar topics and how investors can capitalise on new and ongoing conditions in the aviation sector, join us at the conference on the 28th March. CLICK HERE to view the event agenda and to book your ticket!

High-level overview for investors

[01:05] We saw softening of engine lease rates for current-gen aircraft in the initial wave of the pandemic then a firming of engine lease rates slightly ahead of traffic recovery, particularly for NBs. Do you agree with this and where are we now for NB engine lease rates? 

[05:22] When looking at pre-pandemic rates, 2019 saw a particularly high level of engine lease rates; what was the reason for this?

[06:15] How are WB engine lease rates recovering? Are certain engine types seeing better recovery rates?

New-tech engine issues

[09:00] There has been lots of coverage on the issues facing engine OEMs in terms of performance and reliability of new-tech issues. What does this issue mean for engine lessors?

[11:38] How deep is the inventory of new-tech NB engines from the engine lessors?

[14:55] The airframe production targets have revised delivery targets but still plan to ramp up production this year. Could these issues get worse in the next 6 to 8 months as more aircraft engines get delivered?

Quarterly highlights

[16:45] Looking at Q1 2023 is there one engine variant which is achieving unusually high lease rentals versus other variants? Which model would you say is seeing a real softening in either leases or values?