What I love about our industry and GA Telesis is that they are global and dynamic! What I dislike is its cyclical nature. In Q1 of 2020, I was feeling perhaps, that cycles were a thing of the past and that our industry was headed towards new perpetual growth horizons. Then, when you least expect it, a pandemic caused global aviation traffic to decline 65.9%. However, change is the law of life, and change offers the opportunity to grow. To change something, you must look in a new direction and evolve into what the market needs, versus what it is used to be. That is the story of how GA Telesis came to be and the creation of what is known as Green-Time Leasing™.
Until the COVID pandemic hit, engine demand exceeded supply. Engines were leasing and trading at premium rates. New capital and investors were drawn to the market, and new companies quickly built engine portfolios. In that market, there were few opportunities for leasing green-time, but that soon changed. The pandemic reversed the demand – the supply situation almost completely turned 180 degrees, and airlines started to retire early. Within a month, the supply of spare engines significantly exceeded a very modest demand. Much like the onset of GA Telesis, the market shifted from standard operating leasing to more of a Green-Time Leasing™ model.
I guess one side benefit of the early retirements of high numbers of aircraft is the availability of a significant and fresh source of used, less expensive parts, including landing gears, APUs, engine modules, and serviceable engines. Given that airlines will need to pursue a strategy of slowing down MRO spending, it is expected that operators will turn to used parts and engine markets to lower their maintenance costs. For in-service aircraft nearing the end of their engine life, swapping in serviceable engines will allow airlines to put off costly engine restorations to a later date or avoid them altogether. As the percentage of global fleet flying will steadily increase, and the number of shop visits will rise again – we want to be ready to support our customers with a low-cost alternative solution.
We should use the existing market to take advantage and prepare ourselves for the near future – when aircraft and passengers return to flying. This will be when we want to support our partners with flexible and high-quality solutions, including engine programs that could be further supported by our GATES engine MRO. This year we must make business decisions that will foster growth and increase our market presence.
Never before has the industry trends been more aligned with GA Telesis‘ core products and our ability to provide large-scale engine leasing support programs.