Chang Cheow Teck

Singapore’s ST Aerospace has made its first foray into the leasing business after forming a joint venture with Japan’s Marubeni that will offer the CFM International CFM56 family of engines to customers globally.

The new Singapore-based company, Total Engine Asset Management (Team), will be equally owned and jointly managed by the partners. It is expected to begin operations in the second half of 2011.

Team’s initial engine leasing portfolio will include the CFM56-3, CFM56-5B and CFM56-7B engines that are used to power the Airbus A320 and Boeing 737 family of aircraft. 

The joint venture will leverage ST Aerospace’s expertise in total engine support, including engine technical management and engine Maintenance-By-the-Hour (MBH), alongside Marubeni’s extensive experience in financing and marketing knowledge, to bring value added solutions to customers worldwide.

“Team adds a new dimension to the engine total support capabilities already in place within ST Aerospace,” said Chang Cheow Teck, president ST Aerospace. “This significant partnership with Marubeni adds to our list of successful strategic partnerships and reflects our commitment to create long term value for our customers.”

Other notable joint ventures that ST Aerospace has entered into include Singapore Precision Repair and Overhaul with Messier Bugatti – a facility that specialises in the repair of landing gear systems and components.

Additionally, ST Aerospace Technologies, in collaboration with XAICO, is scheduled to open in 2012 and is an engine facility located in the Xiamen Aviation Industrial Zone that will provide MRO (maintenance, repair and overhaul) and total support services for the CFM56-5B and CFM56-7B engines.

“Beyond collaborating with our partners to form joint venture facilities, we also engage them in the engineering arena, designing and developing several products,” a spokesman for ST Aerospace told Asset Finance International.

“Noteworthy examples of these type of partnerships include our collaboration with Boeing for the Boeing 757-200 PTF conversion, as well as Eurocopter and CATIC for the development of the EC120 light helicopter.”

Gentaro Toya, senior operating officer at Marubeni’s Transportation Machinery Division, also commented: “Marubeni has an extensive track record in the investment of engine development programmes and aircraft leasing, as well as providing sales agency services for commercial aircraft, engines, business jets and various other services including aircraft components and airport ground handling services.”

Choo Han Khoon

“Over the last few years, there has been significant growth in the engine leasing market. We believe that this growth will be further propelled by the increased rate of new aircraft deliveries,” said Choo Han Khoon, executive vice-president, Engine Total Support at ST Aero.

“This collaboration is our first formal foray into the leasing business, and it now allows us to extend our engine total support expertise to better meet our customers’ needs for integrated engine solutions,” he concluded.

The joint venture plans to invest approximately US$100m worth of assets within the first two years, with equity injection of up to US$40m.