What to Know About Today’s Loaner Engine Market

For the past couple of years, aircraft owners and operators facing a major MRO event who are looking to loan powerplants to keep their aircraft airborne while their regular engines are inspected, repaired or overhauled have been warned to act early.

A reportedly tight supply of loaner engines and spare parts continues to be impacted by ongoing supply chain issues, meaning that access to spare powerplants may not be a given for those who leave their planning too late – and especially those who are not enrolled on an hourly engine maintenance program.

Geoff Corbeil, Senior Director, Customer Commercial Services at Pratt & Whitney Canada says that, like all its engine OEM peers, the Canadian engine manufacturer is dealing with the persistent supply chain challenges impacting its ability to serve aircraft owners and operators at traditional levels.

But he adds the company is committed to resolving the situation, working with aircraft operators to ensure they have a solid plan.

With specific regard to loaner engines (or ‘spare’ engines as the OEM calls them), Corbeil is confident that as 2024 progresses, “our 1,000-strong spare-engine inventory – the largest of any engine OEM in the world – will remain at the ready to meet customer demand for both rental/lease and for exchange.”

Part of the reason for his confidence owes to the engine exchange program which P&WC introduced in 2016 under the P&WCSMART portfolio. “With an engine exchange, the customer gives us their existing timed-out core and we provide them with a freshly overhauled engine at a ‘no surprises’ flat- rate price,” Corbeil explains.

“The engines we receive in exchange are then inducted into our MRO network for overhaul and subsequently placed in our inventory for both spare/loaner engines and for future engine exchanges, based on our demand forecasts.”

In 2023, among all the engines that were inducted into P&WC’s shops for overhaul the percentage that were from engine exchanges was in the mid-teens. “We anticipate this will continue to grow by 30% annually for the next five to six years,” Corbeil reveals, which he believes would see the company become the preferred overhaul provider for many P&WC engine operators.

“As we continue to add new engine models that are entering service such as the PW812D and the PT6E Series, some other engine models are migrating to engine exchanges and that has allowed us to serve this growing demand without having an impact on the size of our engine rental pool which has remained constant.”

Meanwhile, Rolls-Royce’s Senior Vice President of Customers & Service, Business Aviation Andrew Robinson says his company has heavily invested in its aircraft availability network, and its lease pool currently consists of 250 engine and nacelle lease assets located around the globe.

“As such we have lease assets available for all our engine programs,” he adds, with Rolls-Royce strategically placing CorporateCare spares stores in key areas where large populations of Rolls-Royce customers are located. The newest of these is set to open at JFK to better assist the US East Coast market.

Another engine OEM, GE Aerospace collaborates with several third-party partners to help address customer needs. “Our OnPoint customers are given first priority to our lease assets as a benefit for being on our engine program, which provides comfort that they won’t have to source a lease engine on their own,” a company spokesperson offers.

However, from the perspective of Sean Lynch, Managing Director of Engine Assurance Program (EAP) which offers an alternative to engine coverage for older aircraft platforms, “Any engine model is currently hard to find in regard to rentals”.

Lynch says EAP has purchased an additional 22 engines in the last 12 months to support the EAP program-enrolled fleet and keep everyone flying. “While we have yet to leave a customer stranded without a rental engine, it hasn’t been without some juggling.”

With multiple engines in the shop waiting on various parts that are on back-order, he says, “I am really not sure where the issues are with getting parts from the manufacturers.

"Either raw materials are harder to find, or there aren’t enough vendors making the parts.

“Maybe the OEMs need to incentivize the vendors to make small batches of parts when the vendors would prefer to make much larger batches of parts for commercial aircraft engines. Or perhaps it’s a combination of all of these.”

Admittedly, Lynch notes, Williams International engines seem to be less affected, with the OEM still controlling the manufacturing process for most of its engine parts – an activity he says others have moved away from in recent years.

Do Engine Maintenance Programs Guarantee a Loaner?

The industry’s experts are agreed on the fact that those enrolled with hourly engine maintenance programs will be at the front of the line should a loaner engine be required.

For example, Rolls-Royce says it guarantees access to loaner engines in any event for CorporateCare or CorporateCare Enhanced customers, with the company “pulling from our network to provide the closest lease asset,” Robinson adds. “In these events, we also cover the labor, shipping, tooling, etc., needed to get our [CorporateCare] customer’s aircraft back in service.”

Similarly, aircraft owners and operators enrolled with Pratt & Whitney Canada’s Eagle Service Program (ESP) are assigned an account manager who monitors all engine lifecycles. 

“The account manager will know well in advance of a scheduled event that would require a spare engine – for which P&WC offers a variety of options,” Corbeil assures. In the case of an AOG, “the ESP account manager will champion the customer’s cause to ensure a rapid return to service.”

Similarly, priority access to GE’s lease pool is given to OnPoint-enrolled operators, “GE also will also endeavour to at least locate an available lease engine for our customers within 24 hours of notification from the customer that a loaner is needed,” the GE spokesperson adds.

But Lynch warns against any complacency from aircraft operators in this regard. “The idea behind having a fully covered and enrolled engine program is that you have rentals when you need them for either scheduled or unscheduled engine removals.”

Barring an Airworthiness Directive coming out that grounds an entire fleet of aircraft, “in the normal course of business everyone should get rental engines when they are in the shop if they are on an engine program.

"But we are not in a normal course of business. It could potentially become very messy for non-engine program customers if the existing parts supply problems are not resolved soon.”

Tips for Operators Needing Loaner Engines

Besides being enrolled on an engine maintenance program to get on the priority list for a set of loaner engines when needed, there are some other steps aircraft owners and operators can take to help their cause and smooth the process ahead of time.

Lynch reckons anyone facing a shop event lasting more than a month should be considering loaning engines. “Begin planning at least six to eight months before your engine will be removed during the scheduled shop visit,” he says. 

“That is how far in advance you should begin working on securing a rental engine.” Moreover, he suggests paying a deposit to secure the rental engine prior to your event.

Corbeil agrees about allowing plenty of lead-time. “An aircraft owner/operator can easily estimate well in advance when an engine will require shop maintenance, so advising P&WC of an engine-rental requirement as soon as possible – preferably months in advance – goes a long way towards ensuring that we can meet the need.”

GE’s spokesperson recommends operators also establish well in advance who will perform the engine removal and loaner engine installation so that there’s an understanding of what tooling or equipment may be required to keep the operational disruptions to a minimum (though in the case of GE OnPoint-enrolled operators, the spokesperson adds that GE manages the whole process, including sending a team to remove and install the engine).

“We would also recommend reaching out to GE or a lessor of your choosing to ask for a draft lease agreement in advance of the need,” the spokesperson adds. 

“This saves critical time by vetting the contract with the various legal and airworthiness authorities from both parties when there is not an urgent need for an engine.”

Moreover, the spokesperson suggests operators ensure they acquaint themselves with “the going rates for loaner engines so that there is less ‘sticker shock’” when it comes to signing a lease agreement.

Corbeil encourages operators to explore the various options that might serve their individual business models. “In addition to traditional long-term engine leases, we also offer a portfolio of spare engine solutions that provide various benefits – such as prioritizing capital, minimizing risk, and cost-effectively extending the life of an aircraft.”

Finally, aircraft owners should ensure they’re appropriately covered to fly with a loaner engine, Robinson highlights.

 “Having access to a good insurance broker is vital to obtain the insurance certificate needed to allow us to install an engine,” Robinson says, adding that it’s the one part of the process Rolls-Royce cannot supply.

In a worst-case scenario, “if there is no hope of receiving a rental engine and the engine shop visit is going to take four to six months, try to time a large airframe maintenance event, including an avionics upgrade and/or paint and interior so that the downtime isn’t entirely wasted,” Lynch suggests.

Or for owners and operators whose upcoming scheduled event is likely to last less than a month, charter, jet cards, or a short-term aircraft lease could be attractive alternatives to loaning engines, he says.

What’s the Outlook for the Loaner Engine Market?

Lynch doesn’t expect much to change in 2024, believing the supply chain problem isn’t going away any time soon. With lots of experienced aircraft maintenance professionals leaving the business, too, he says, now is a time for action, not excuses.

GE’s spokesperson agrees that the outlook is shaping up to be very similar to 2023, but adds that for newer fleets, such as the Passport-powered Bombardier Global 7500, GE continues to build additional lease pool engines that will be specifically reserved for GE OnPoint customers.

Corbeil sees a different outlook. “As we progress through the first half of 2024, there should be an improvement in industry conditions that will likely allow us in the second half of the year to continue maintaining a solid supply of engines for both rental/lease and for exchange.”

Ultimately, while Robinson is satisfied Rolls-Royce's lease pool is sufficient, he says thorough planning and solid forecasting tools are key.

“In Business Aviation it is common for the first shop visits to occur years after an engine has gone out of production,” he notes. “For engine OEMs, it’s important to plan to build and finance all the forecasted lease assets for the life of the program much earlier than they will actually be required.”

More information from:
Engine Assurance Program: www.eap.aero
GE Aerospace: www.geaerospace.com
Pratt & Whitney Canada: www.prattwhitney.com
Rolls-Royce: www.rolls-royce.com/enhanced

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