BAE Systems is using its experience in asset
management to diversify into the growing market for leasing or
selling aging commercial aircraft on behalf of airlines and
aircraft owners.
Earlier in March, the defence and aerospace
giant signed “remarketing mandates” with US-based Willis Lease
Finance Corporation and AviancaTaca, one of Latin America’s largest
airline groupings.
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Although the profit margins involved in
remarketing aircraft up to 20 years old or more are fairly low, the
size of the market makes it attractive for leasing companies.
There are currently about 2,690 idle
commercial jet aircraft, of which about 600 are thought to be in
good enough condition to re-lease or sell, BAE said.
Although BAE Systems continues to lease a
large number of commercial aircraft to about 30 airlines worldwide,
it has stopped buying new planes – meaning that its traditional
leasing business will shrink over time as its fleet ages and is not
replaced.
BAE hopes it can boost its revenues by
increasing in new markets, such as third-party remarketing and
lease management services.
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By GlobalDataRob Morris, vice president marketing and
analysis, at BAE Systems Asset Management, said a “significant
number” of aircraft owners lack the skills required to remarket
their own aircraft.
“Airlines such as these recognise that their
own skill sets centre upon the operation of aircraft in
passenger/freight networks and typically, when it comes to disposal
of fleets at the end of their operational life, the airline prefers
not to be distracted with a disposal project which can require
significant resource in order to achieve best value for the asset,”
he added.
BAE’s asset management business, part of BAE
Systems regional aircraft, has recently won a number of contracts,
including one with AviancaTaca Group, to sell or lease Fokker 100
jet liners, and a deal to buy aircraft for Willis Lease Finance of
California, which will strip out the engines from the planes to
lease to its customers.
Since its formation in 1993, BAE has said its
asset management business has made more than 1,800 lease, sale and
other transactions, worth more than $3.1 billion.
nick.huber@vrlfinancialnews.com
