-The head of aircraft leasing giant AerCap predicted that tightness in global jet markets would last through the rest of the decade, fuelled by supply chain issues and conservatism on production among engine makers.
He was speaking after AerCap gambled on continuing bottlenecks in MRO or repair shops by agreeing to buy 150 new spare LEAP engines from French-U.S. venture CFM, which powers all Boeing (NYSE:Shortages of spare engines, especially those made by CFM rival Pratt & Whitney, have forced airlines to ground jets while waiting for repair slots, which are already scarce due to faster than expected wear-and-tear in harsh climates.
"The MRO shops are like dentists. They only get paid when they open something up, take something out and put something back in. The difference with these engines is it's a million bucks to put something back in every single time," Kelly said. Analysts say the interests of lessors and engine firms are aligned because both recoup their investments over 20 years or so, and dislike new planes crowding out older ones too quickly.