FTAI Aviation Targets Southeast Asia for Engine Module Exchange Expansion

FTAI Aviation targets Southeast Asia for expanding its module exchange business for CFM56 and IAE V2500 engines, seeing significant growth opportunities. The company performed 72 module exchanges in Q1 2024 and targets 250-300 exchanges for the full year.

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Aqsa Younas Rana
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FTAI Aviation Targets Southeast Asia for Engine Module Exchange Expansion

FTAI Aviation Targets Southeast Asia for Engine Module Exchange Expansion

FTAI Aviation has set its sights on Southeast Asia as a key region for expanding its module exchange business for CFM56 and IAE V2500 engines. The company has been focusing on this market for the past six to nine months and sees it as a significant growth opportunity. "It's a huge, huge market opportunity that we were relatively underrepresented [in] but that will be changing this year, and we see that as a future significant growth opportunity," said David Moreno, demand, solutions for FTAI Aviation.

Why this matters: The expansion of FTAI Aviation's module exchange business in Southeast Asia has significant implications for the global aviation industry, as it addresses the growing demand for cost-effective engine maintenance solutions. This development could also have a ripple effect on the region's economy, creating new job opportunities and stimulating growth in related industries.

FTAI Aviation is particularly bullish about expanding its V2500 aftermarket business, having already achieved significant scale on the CFM56 engine platform. Full V2500 overhauls are more expensive and complicated than those for the CFM56, creating demand, solutions. The company performed 72 module exchanges in Q1 2024 and targets 250-300 exchanges for the full year.

The Pratt & Whitney GTF engine issues have also driven increased demand for the V2500, with many GTF operators transitioning out of the newer engine. "If we can do the MRE [maintained repair & exchange], put it on a long-term lease, then you can sell it as a cash-flowing asset and create value two different ways," explained Joe Adams, CEO of FTAI Aviation.

FTAI Aviation's aerospace product sales rose significantly to $189 million in Q1 2024, up from $85 million a year earlier. The company has ample capacity at its two maintenance facilities in Montreal and Miami and is working to increase demand, solutions further to meet the growing demand for its module exchange services.

With its focus on the Southeast Asia market and the expanding V2500 aftermarket business, FTAI Aviation is well-positioned to capitalize on the significant growth opportunities in the region. The company's module exchange services provide a cost-effective alternative to full engine overhauls, and the increased demand driven by Pratt & Whitney GTF engine issues bodes well for FTAI Aviation's future prospects.