We deal with various aircraft components beyond just landing gears, even if they’re not directly linked to acquired engines. These components can often be obtained at a lower cost and can serve multiple purposes. For instance, we might acquire landing gear from an aircraft even if we’re not dealing with its specific engines. As long as there’s a market demand and potential resale value, we consider these items.
Our engine acquisitions aren’t based solely on spare parts availability. We assess engines based on their potential for repair, resale, and profitability. If there’s a significant price difference, we might buy an engine for well below market and then proceed to dismantle it for parts. However, the decision to acquire an engine is guided by the potential value we can extract from it through our operations.
Our business model revolves around different aspects of engine management (and aviation arbitrage). We focus on the condition of engines (and parts), financial considerations, repair and servicing, as well as the resale (value and potential) of parts. Some parts can be directly sold, while others might require repair before they can be marketed. This approach allows us to maximize returns by efficiently utilizing engine components.
Our primary focus is on CFM56-3C and -3B engines. These engines have a significant presence in the market, with potentially thousands of cycles remaining. The number of cycles remaining greatly influences the engine’s resale value. Engines with higher cycles remaining tend to command higher prices due to their extended lifespan and potential utility.
Our emphasis is on the CFM56-3C engine. The choice is influenced by several factors, including local repair capabilities and potential profitability. Our proximity to repair shops in Miami plays a role in this decision. We carefully evaluate engines based on their condition, repair needs, and expected demand in the market before making acquisition choices.
The potential of our operations is significant, and additional capital could further amplify our capabilities. With a substantial infusion of funds, we could expand our reach, take advantage of more opportunities, and potentially accelerate our growth trajectory. Our track record with limited capital underscores the potential impact that additional resources could have on our business.
The market for these engines is extensive and spans various geographical regions. Engines can be sold globally, with demand coming from different parts of the world, including Europe, Asia, and South America. Our strategic location in Miami, a key point of contact for many regions, enhances our ability to tap into diverse markets (in the future).
The timeline for turning around engines varies based on a range of factors. Repair complexity, the availability of replacement parts, and shop capacity all contribute to the timeline. Engines that require fewer repairs or have readily available parts can be flipped within 60 to 120 days. However, certain variables, including shop workload and specific repair needs, can influence the overall timeline.
We’ve observed that engines are often presold even before we acquire them. Our production is driven by the demand signaled through these pre-sales. Additionally, we might use parts from certain engines to expedite the assembly of others. This strategic approach allows us to streamline our processes and optimize the overall timeline for selling engines and their components.
Our approach involves a comprehensive assessment of the engine’s condition and specifications. This assessment includes verifying manufacturing details, conducting a thorough inspection of components, and evaluating the potential for repair or resale. Based on this assessment, we determine whether the engine should be sold as a whole, disassembled for individual part sales, or sent for repair. The decision-making process is guided by factors such as market demand, repair costs, and potential returns on investment.