Soaring demand for extra engines prompts Willis' endorsement of a holistic strategy
Willis Lease Finance (WLFC) has announced impressive financial results for 2023, with a record revenue of $419 million, a 41% increase from the previous year. This growth was driven by a surge in demand for spare engines, a trend attributed to added passenger capacity, new aircraft delivery delays, and new-generation engine problems.
The lease portfolio of WLFC, which consists of 339 engines and 13 aircraft, remained stable at $2.22 billion as of Dec. 31, 2023. The lease rent revenue also saw a significant increase of 31%, reaching $213 million. This growth was largely due to the end of COVID-era concessions and the increased demand for spare engines.
WLFC's Executive Chairman, Charles Willis, acknowledged the challenges facing the industry, including original engine manufacturer issues, supply chain disruptions, MRO bottlenecks, and skilled labor shortages. These issues have created a significant demand for spare engine leasing.
To address these challenges, WLFC has been leveraging its asset management and consulting services to predict the timing and cost of shop visits across their entire fleet. This proactive approach has helped their engine repair shops in the U.S. and UK to mitigate extended turn times in the industry.
In addition, WLFC's aircraft base maintenance facility at Teesside Airport in the UK has been instrumental in streamlining aircraft transitions between lessees. The facility also offers end-of-life solutions like part-outs and teardowns, ensuring the maintenance of high-integrity technical records and preserving the value of their assets.
CEO Austin Willis highlighted the importance of sourcing parts from the materials business. This practice helps minimize turn times and reduce maintenance costs, further contributing to WLFC's success.
Firms providing maintenance services for WLFC include major engine service providers like AAR Corp, StandardAero, and Lufthansa Technik. These service providers specialise in engines from manufacturers such as Rolls-Royce, General Electric, and Pratt & Whitney, focusing on heavy maintenance, repair, and overhaul (MRO) of turbofan engines.
The financial success of WLFC is also reflected in its pre-tax profit, which increased from $10 million in 2022 to $67 million in 2023. The maintenance reserve revenue also climbed significantly, from $83 million to $134 million.
WLFC's achievements in 2023 underscore its commitment to delivering value to its customers and shareholders amidst challenging industry conditions. The company continues to innovate and adapt, positioning itself as a key player in the aviation industry.
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