Mature & Sunset EnginesProjections & Exit Strategies

David Rushe, Director Sales & Marketing – Europe

May 2018, ELTF, London

MAGELLAN AVIATION GROUP OVERVIEW

Q2 2018 – MARKET TRENDS: THE PERFECT STORM

• Manageable Fuel Prices

• Passenger Demand

• Green time v Shop Visit

• Reliability issues (age / ADs & SBs)

• New product delays

• Enduring appeal of older assets

• Freight Market

MAGELLAN FOCUS ENGINES

Regional

PW100

CF34-3

CF34-8/10

AE3007

Narrowbody

CFM56-3

CFM56-5A

CFM56-5B/7B

V2500-A5

Widebody

PW4000-94

PW4000-112

CFM56-5C

Narrowbody

CFM56-3

CFM56-5A

CFM56-5B/7B

V2500-A5

REGIONAL ENGINES (CF34-3/PW100)

• Demand for older turboprops and

CRJs

• Diversifying Fleet

• SV Engines trading below HSV Costs

• Buoyant parts market

• Strong lease rates

• Narrow shop network

NARROWBODY ENGINES (CFM56-3/5A)

• 737 Classic P2F demand remains solid(ish)

• Shortage of Serviceable 23.5k -3C1s

• Prolonged 5A operation (Delta, Air Canada,

LH…)

• Narrow Shop network

• Inflated lease rates

• SV engine outright cost < shop visit

WIDEBODY ENGINES (PW4000/CFM56-5C)

• Shortage of Serviceable high thrust PW4000s

• Renewed 767 demand

• High volume of 5C teardowns - shortage of good engines

• Prolonged A340 demand

• Narrowing SV network

• Mature A330ceo/B777 Classic engine management strategies

• Dependent on low fuel prices

• SV Cost exceeds cost of serviceable engine (if you can find one!)

MATURE ENGINE SPARE PARTS SUPPORT

• OEMs shift support to new programmes

• Aftermarket providers engage in legacy

engine JVs

• Spike in engine teardown players

• Availability of surplus material from common

platforms

• Lease/Purchase/Exchange v Shop Visit

• Reduced SV builds

• Narrowing of shop network

PW4000 FAMILY SNAPSHOT

• Strong lease demand for high thrust models

• 747-400/777 Classics in decline. PW-powered

A330 vulnerable

• High mature SV costs exceed green-time

engines

• Declining intervals

• Parts Commonality

• 8.6% annual decline in PW4000 fleet size

(Aviation Week)

• Asia-Pacific centric operations

MATURE ENGINES – EXIT STRATEGIES

• Part-out / Consignment

• Common Platform?

• Stub-leasing market

• Secondary/tertiary operators

• Exchange

• Engine may be complicated by

OEM/MRO FHA agreements

Thank you / Go Raibh Maith Agaibh