Portable engine maintenance Implications for lessors and the aftermarket. Les Cronin, Director Sales Americas

Transcription

1 Portable engine maintenance Implications for lessors and the aftermarket Les Cronin, Director Sales Americas MRO Network Aero Engine Americas Fort Lauderdale, 11th February 2016

2 MTU Aero Engines business model Group sales (2014) : 3,946 M (5,327 M$) COMMERCIAL ENGINE BUSINESS MILITARY ENGINE BUSINESS COMMERCIAL MAINTENANCE Share in sales: ~ 53% Partnerships with OEMs going back decades Focus on LPT, HPC and TCF Main products: CF6, GEnx, GE9X, GP7000, PW2000, PW1000G, V2500 Share in sales: ~ 14% European and U.S. engine programs Lead industrial partner to the German Armed Forces and US Air Force Share in sales: ~ 33% Leading provider of engine MRO service solutions Global network Main products: CF34, CF6, CFM56, GE90, V2500, P&WC engines 2

3 What does MTU Maintenance stand for? Largest engine MRO portfolio Innovative and integrated service solutions over the entire engine lifecycle Tailored offerings providing maximum value Global network and reach Over 16,000 shop visits Customer dedication and service 3

4 The growing influence of aircraft leasing companies As air travel grows so does the demand for new aircraft demand for aircraft leasing and financing Close to 50% of all aircraft will be financed via leasing companies by

5 The importance of aircraft leasing companies Top 10 lessors account for 56% of the leased fleet (~ 5,245 aircraft) 66% by value (~ $156b) Growth over recent years has been due to availability of cheap liquidity Leasing companies are a combination of. Finance Company Technical Expertise Asset Trader Aircraft Marketer 5

6 Typical lease conditions & engine related issues Engine condition Same condition at redelivery as at delivery - less wear and tear Minimum hours & cycles remaining since last shop visit AD & SB compliance Full serviceability (PR vs. OH) Full documentation incl. back to birth* No carry over items like re-inspections etc. General * Wherever applicable Engine performance EGT margin in line with the lessee s or world fleet deterioration No/limited DER content (uncritical parts) Residual value concerns Re-marketability issues Material & parts 6

7 The cost of aircraft lease transition Example: 8-year old aircraft at EOL Additional aircraft maintenance costs Narrow-body = Ø $1.65m Wide-body = Ø $3,0m Operating leases adds costs as EOL conditions supersedes airworthiness condition to provide suitable re-use for the next lessee Additional engineering resources required at EOL by lessee and lessor averages $150K for each party per aircraft Source: IBA Highlights 2015 The cost of a EOL transition is not visible until it is too late 7

8 What are the interests of the players with leased engine assets Lessor Lessee MRO provider Residual value preservation Smooth transition between lessees Management & optimization of maintenance reserves Influence on shop visit and timing Asset end of life exit strategy Cost of ownership As received engine condition vs. redelivery condition Access to maintenance reserves for pre-consumed life Transfer of warranties and maintenance coverage Technical support MRO cost optimization Residual value preservation (technical/quality standards) Asset value optimization throughout engine life cycle Comprehensive support for continued operations Vertical integration of interests via life asset management programs 8

9 MTU-tailored solution: Lease Enhancement Program How does it work? Today s landscape MTU Landscape Lessor Lessor Lease fee & MRO reserves MRO reserves Lease fee & MRO reserves LEP contract/ payment & MRO oversight MTU Operator (Lessee) MRO services & payment MTU (MRO) Operator (Lessee) Full maintenance coverage and service MTU (MRO) All parties benefit from as a fully integrated product 9

10 One-stop solution for asset owners and operators Optimized cost of ownership over the entire life cycle Acquisition (new/used assets) MRO & operations Operator transition Phase-out Lessor Flexible phase-in/-out of engines Spare engine financing Minimized inventory (GSE, QEC, rotables ) MRO cost predictability Proactive management Residual value retention / maximization Ease of portability throughout the life Risk mitigation End-of-life value maximization Alignment of airframe/ engine life Lessee Carefree operations EoL inspections High-quality standards Logistical services Guaranteed thrust 10

11 Benefits Ease of portability throughout the life Complete portability over the entire service life Ease of transfer from between lessees Severity adjustments applied if >5% of operations in challenging environment (erosion and pollution) No restrictions and limitations Erosive operation A Polluted operation B Neutral operation C MTU provides complete portability and mobility of assets throughout their life and ensures the required maintenance reserves are applied 11

12 Benefits Enhanced MRO predictability Lessor MRO cost predictability Full asset control Cost-optimized build standards over life Engine records consistency Retention of asset value MRO Workload predictability Tailored solutions Standard pre-defined workscopes (e.g. DERs) Predictability of engine DOC Lessee Ease of EOL return Continued operation Better buying power of lessors Maximized predictability and minimized cost for all parties involved 12

13 MTU s portable maintenance... provides complete peace of mind to lessor and lessee includes engine MRO through all phases of life including transitions transfers all maintenance risks and exposure to MTU permits lessors to maintain reserves with full service benefits provided to the lessee ensures the easy transition protects asset residual values at all times achieves end of life value maximization for lessors 13

14 Thank you and looking forward to your questions! Les Cronin Director of Marketing & Sales Americas MTU Maintenance Hannover GmbH Muenchner Strasse Langenhagen Germany Tel Cell: