Willis Lease Finance Corporation (“WLFC”) leases large and regional spare commercial aircraft engines, auxiliary power units and aircraft to airlines, aircraft engine manufacturers and maintenance, repair and overhaul providers in 120 countries. These leasing activities are integrated with engine and aircraft trading, engine lease pools and asset management services supported by cutting edge technology through its subsidiary, Willis Asset Management Limited, as well as various end-of-life solutions for engines and aviation materials provided through its subsidiary, Willis Aeronautical Services, Inc. With business units Willis Engine Repair Center US/UK and Jet Centre by Willis, as well as subsidiary Willis Aviation Services Limited, the Company’s service offerings also include Part 145 engine maintenance, aircraft line and base maintenance, aircraft disassembly, parking and storage, airport FBO and ground handling services.
Any downtime is an immediate impact to your bottom line, whether it is an aircraft-on-ground (AOG) situation, unplanned repairs, scheduled maintenance, mandated service bulletins, or even a delayed gate turn at an airport. Minimizing and managing that downtime is critical to protecting revenue and maximizing customer confidence in the airline’s brand. WLFC plays a huge role in minimizing downtime by providing quick and high-quality support services to aircraft. More about aircraft leasing and support from Austin C. Willis, CEO, WLFC in an Exclusive Interview with MRO Business Today Read On…….
Q – WLFC’s strategic engine pooling program, can you explain it to us in brief?
Ans – It is all about efficient use of resources. As engines become increasingly expensive, the case for pooling of engines becomes more compelling. This is particularly true for smaller airlines that lack the economies of scale needed to justify spare engine ownership. We function as an aggregator of demand by allocating engines (both our own as well as customers’ engines) to where they are required, thereby smoothing out peaks and troughs of demand. Airlines now a days are sophisticated, they see through gimmicks and acting simply as a go-between in order to earn a risk-free fee does not work. We focus on adding tangible value to our customers, and the profits follow.
Q – How flexible is the lease process with WLFC?
Ans – WLFC carries a higher SG&A than other leasing companies. We are more hands on than most and have the ability to completely customize our products. These bespoke leases take additional legal, technical, and accounting resources; however, they can provide real value to the customer. Our ability to remarket assets so effectively enables us to build leases that best fit a customer’s demand requirements, in contrast to a run-of-the mill 7+ year sale and leaseback where the customer will be paying lease fees for prolonged idle periods. That is a longwinded way of answering your question…yes, our leases can be extremely flexible.
Q – WLFC’s subsidiary Willis Asset Management Limited has been selected by major airlines for determining the airworthiness of Airbus A320 aircrafts. What are the responsibilities as a CAMO (Continuous Airworthiness Management Organization) provider at various MRO locations in Asia and Europe?
Ans – The responsibility of a CAMO is to monitor and maintain the continuing airworthiness of an aircraft whether it be in operation, maintenance, or storage. The CAMO is responsible for developing the maintenance program for an aircraft and obtaining approval of this with the regulatory authority (i.e., EASA, UK CAA, etc.). Ensuring the aircraft airworthiness is maintained, the CAMO instructs the appropriate inspections and maintenance to be performed to the aircraft in accordance with the approved maintenance program and by an appropriately approved MRO. It will also continue to monitor all the applicable airworthiness directives to ensure these are current and compliant and that all defects discovered on the aircraft are resolved to an airworthy state. In readiness for flight, successful completion of all these activities will conclude in the CAMO being able to make a recommendation to the competent authority of the Member State of registry for the aircraft for issue of an Airworthiness Review Certificate that certifies the aircraft as fit to fly. The CAMO is responsible to the authorities for allowing the aircraft to return to service and continuation of its operation in an airworthy condition.
Q – How does WLFC guarantee a quick response for urgent AOG requests from operators?
Ans – There are five elements that are needed to effectively meet AOG requirements. The first is a global marketing presence…you need to have people in every time zone, and preferably in every region, who are in constant communication with the customer. Next, you need to have a large portfolio of short-term lease engines – it is critical to have engines coming off lease regularly in order to meet unanticipated demand. Third, these assets must be forward deployed so the customer can access them quickly. Fourth, you need high quality – the records have to be impeccable – so the customer is not slowed down during the inspection. Finally, you need to have the legal framework in place with the customer beforehand to avoid protracted negotiations of terms and conditions. We have this structure in place and implement these practices daily.
Q – Can you share details about the WLFC ConstantThrust® program?
Ans – Our ConstantThrust® program leverages our sizable engine portfolio with our balance sheet capability. There are many assorted flavors, but our most prolific is where we execute a sale and leaseback of a fleet of aircraft with a customer, then, when an installed engine becomes unserviceable, we simply replace it with another suitable engine from our portfolio. This avoids the customer having to budget for shop visits, search for spare engine leases, and concern themselves with MRO overages and turn times. Moreover, it gives the airline a high degree of flexibility when trying to phase out a fleet in coordination with a new fleet introduction…where the delivery times often slip. Without ConstantThrust®, airlines are often left with parked aircraft or expensive shop visits as they try to meet aircraft redelivery conditions with traditional lessors.
Q – What are some potential growth opportunities for WLFC in the existing and potential new regions?
Ans – We see significant growth opportunities in the next few years from aircraft transitions and startups / LCCs looking to efficiently manage spare engine capacity. A substantial proportion of the legacy carriers are looking to renew their fleet over the next five years. Our products are well suited to support this transition, specifically our ConstantThrust® program as I described in greater detail above.
We are seeing a material increase demand from the LCCs and smaller airlines looking to avoid purchasing or signing up to long-term leases on GTFs and LEAPs by contracting with us for ConstantAccessTM. ConstantAccessTM is a product where we guarantee availability of our assets with short notice. We have signed more ConstantAccessTM agreements in the past year than in the prior three years. This is the result of airlines being concerned about reliably accessing the short-term engine leasing market in the future due to low supply, combined with a reluctance to buy an engine given the cost, or sign up for an expensive long-term lease. I expect this trend will continue in a higher interest rate environment as the carrying cost or long-term lease rates of engines is accordingly high.
