AirCastle believes that Airbus and Boeing will re-engine their stalwart A320 and 737 lines but entry-into-service may be a year or two later than is being bandied about in the media.
"I think there is enough pressure on at least one of the manufacturers is to do a re-engining," Ron Wainshal, AirCastle's CEO told an investor's conference on 6 April, without naming the manufacturer. "Whatever you hear from the manufacturers in a timeframe, you have to add at least one or two years for it."
"We take re-engining seriously," Wainshal continued. "One of the great attributes to our market is that it is a duopoly. With only two choices, you don't have a fragmented market. Along comes Bombardier, who says they are going to encroach on [Airbus' and Boeing's] market. Airbus and Boeing won't build a brand new airplane but will hang a new engine on it. It will make anybody think twice about choosing Bombardier."
The prospect of re-engining means that AirCastle may alter its acquisition profile. Instead of acquiring used aircraft that are only a few years old, the lessor may shift to aircraft that are five-eight years old with a "safer" residual value profile.
Wainshal continues to shy away from speculative orders.
"We tend to have a bias against new orders. We have to have a really compelling reason for pricing," which was achieved as an early customer for the Airbus A330-200F. "You have to have pre-delivery payments, which are very difficult to finance." He called the large order books held by several lessors as a "burden."
Wainshal also predicted that the leasing industry will look very different in two years either through mergers or significant portfolio acquisitions.