Global Aviation Round-Up from Aircraft Value Intelligence (AVN)
Editor’s Note: This week, John Persinos interviewed Matt Eales, managing director of EAL Engine Services, a UK-based aviation company focused on engine trading, leasing, asset management, teardown programs, and aftermarket support for commercial aircraft engines and components.
Matt has extensive experience in the global engine Maintenance, Repair and Overhaul (MRO) sector. The following is a transcript condensed for concision, with questions in bold.
Matt Eales, managing director of EAL Engine Services
How are supply chain bottlenecks and parts shortages reshaping the economics of engine leasing and aftermarket support in 2026?
Persistent supply chain bottlenecks and parts shortages are reshaping the economics of engine leasing and aftermarket support in several ways.
First, the issue is not just parts availability; it is also capacity and labor. During and after COVID, a significant amount of experienced talent left the industry, and replacing that skillset has been difficult for many Original Equipment Manufacturers (OEMs) and MROs. Although the situation is gradually improving, the shortage of skilled labor has slowed shop throughput and extended turnaround times over the last few years.
Second, because new aircraft and engine deliveries remain constrained, operators are keeping legacy engines flying for longer. That reduces the number of teardown assets entering the market, which in turn limits the availability of used serviceable material. MROs may be full, but if replacement parts, modules and green-time assets are scarce, the commercial impact is significant: costs rise, repair cycles lengthen, and operators need more spare engine cover.
As a result, asset owners with serviceable engines available are in a very strong position. Engines that are ready to lease can command premium lease rates, and owners often have multiple placement options. This shifts pricing power towards lessors and parts suppliers, while airlines and operators face higher maintenance reserves, longer downtime, and increased inventory costs.
More entrants into the engine leasing and aftermarket space may eventually soften the market, but given the ongoing pressure on parts supply, MRO capacity and teardown availability, I would not expect a meaningful easing for at least the next couple of years.
Are airlines becoming more willing to extend the life of legacy powerplants because of delivery delays for new aircraft and spare engines?
In short, yes. Airlines need capacity, reliability and operational certainty, and in the current market that is making them more willing to extend the life of legacy powerplants. New aircraft delivery delays, limited spare engine availability and long MRO turnaround times mean operators cannot always rely on fleet renewal to solve capacity issues. As a result, many are keeping mature aircraft and engines in service for longer.
Legacy engines also have a proven reliability record, which is attractive when some newer engine programs are experiencing shorter-than-expected time on wing, accelerated removals and longer shop visits. The fuel-burn advantage of newer engines is still important, but in some cases the benefit is being diluted by higher maintenance costs, longer downtime, spare engine shortages and more expensive shop visits.
This is changing the economics of fleet planning. Airlines may accept higher fuel burn on older assets if those engines are available, reliable and supportable, especially where the alternative is aircraft-on-ground time or expensive spare engine cover. It is also increasing demand for used serviceable material, green-time engines and alternative repair solutions.
I would expect the current pressure to create more interest in Designated Engineering Representative (DER) repairs, Parts Manufacturer Approval (PMA) parts and broader use of Used Serviceable Material (USM), although there remains some operator, lessor and OEM pushback around this material. Even with USM shortfalls, acceptance is not universal, particularly where asset value, lease return conditions or warranty support are involved.
Overall, legacy powerplants are no longer just a stopgap. In many cases they have become a practical capacity and reliability hedge while airlines wait for new aircraft, spare engines and MRO capacity to normalize.
How is the surge in demand for USM changing teardown strategies and engine asset valuations?
The surge in demand for USM is having a major impact on both teardown strategy and engine asset valuations. In my view, some engine values are now very stretched. Even when modelled with favorable assumptions around the duration of Life-Limited Parts (LLPs), module condition, part-out yield and resale pricing, some prices being paid appear to exceed the engine’s underlying core value.
This is being driven by a very tight market. Airlines are keeping legacy fleets flying for longer, OEM parts remain expensive and difficult to source, and MRO capacity remains constrained. As a result, good-quality USM is commanding premium pricing, pro-rate percentages are high, and owners with access to strong material are in a very favorable position.
Teardown strategies are also changing. Owners are increasingly weighing whether an engine is worth more as a green-time lease asset, a whole-engine sale, or a teardown candidate. In some cases, younger assets may be considered for teardown earlier than they would have been historically, simply because the demand for material supports the part-out economics.
Another factor to watch is the aeroderivative ground-power market, particularly demand linked to data centers. If more CFM56 or similar engines are converted for industrial power generation, those assets are effectively removed from the aviation-certified supply pool. That could tighten USM availability further and push asset and material prices even higher.
What role do independent engine specialists such as EAL Engine Services play as airlines look for alternatives to OEM-controlled maintenance ecosystems?
At EAL, we look closely at what is happening across the market and use our background, technical knowledge and commercial experience to help customers find the best route forward.
That might involve sourcing material, evaluating engine or module options, supporting teardown decisions, identifying alternative repair routes, or finding value in assets that others may overlook. We do not simply follow the market or chase the fastest return. We look at the wider picture and ask where we can create genuine value for the customer.
A big part of our role is listening. When we speak with customers or potential customers, I often use the Jerry Maguire line: “Help me help you.” We want to understand their pain points, bottlenecks and the issues they do not have the time or resource to deal with.
Once we understand the problem, we take it away, challenge it, and look for practical solutions. In a market where OEM parts, MRO slots and spare engines are all under pressure, independent specialists can provide options, agility and a more tailored approach to keeping engines supported and aircraft flying.
Which engine platforms or market segments do you believe will present the biggest opportunities and risks for lessors and aftermarket providers over the next five years?
Over the next five years, I think the biggest opportunities and risks will sit around legacy narrowbody platforms, the aeroderivative market, and independent component repair capacity.
Engines such as the CFM56 and V2500 should remain important as airlines continue operating mature fleets for longer, creating demand for green-time engines, USM, repairs and teardown material. The opportunity is strong demand and pricing; the risk is that valuations become stretched if people overpay based on today’s shortage conditions.
The aeroderivative market could also have a major impact, particularly if engines such as the CFM56 are converted for ground-power applications linked to data centers. Investors are clearly excited by this space, but the effect on aviation USM availability is still uncertain.
Over the next 12 months, we should get a clearer view of whether this demand fully materializes and how much material it may pull away from the aviation supply pool.
Another key area is vertical integration and independent repair capacity. As companies acquire strategically to expand their aftermarket offering, there is a risk that internal material and group priorities take precedence over third-party customer work.
For me, one of the biggest opportunities is a truly independent component shop focused on best price, quickest lead time and customer satisfaction. In a market where parts are scarce and turnaround times are stretched, that type of customer-focused repair capacity will be extremely valuable.
Which emerging propulsion technologies excite you right now?
There are a lot of exciting propulsion technologies in the pipeline, including hydrogen fuel cells, hybrid-electric systems and open-fan engine concepts. Each of these has the potential to reshape the industry over time, particularly around emissions, fuel efficiency and long-term sustainability.
That said, most of these technologies still feel some way off from widespread commercial adoption. From our perspective, the immediate priority is resolving the current challenges around engine reliability, parts availability, MRO capacity and overall market stability.
While the future technology is exciting, I think the industry also needs to focus on making today’s and tomorrow’s engine platforms more reliable, supportable and economically sustainable. Innovation is important, but so is stability.
Thanks for your time.
John Persinos is the editor-in-chief of Aircraft Value Intelligence.
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