FTAI Aviation Closes the Acquisition of LMCES

Rhea-AI Summary

FTAI Aviation (NASDAQ: FTAI) has successfully completed the acquisition of Lockheed Martin Commercial Engine Solutions (LMCES) from Lockheed Martin Canada. The acquisition includes a 526,000-square-foot aircraft engine maintenance repair facility in Montréal, Québec. This strategic move strengthens FTAI Aviation's Maintenance, Repair, and Exchange (MRE) business, enhancing its ability to provide additional maintenance services to airline customers.

The integration of LMCES with FTAI's existing QuickTurn facility in Miami, Florida, significantly boosts the company's capacity to perform up to 1,350 CFM56 module overhauls and over 500 engine tests annually. Both facilities will be rebranded as FTAI Aviation Canada and FTAI Aviation USA, respectively. CEO Joe Adams stated that this acquisition is a major step towards FTAI Aviation becoming the unrivaled leader in MRE, aiming to provide high-quality, flexible solutions to their global customer base.

Positive

• Acquisition of a 526,000-square-foot aircraft engine maintenance repair facility
• Increased capacity to perform up to 1,350 CFM56 module overhauls annually
• Enhanced ability to conduct over 500 engine tests per year
• Strengthened position in the Maintenance, Repair, and Exchange (MRE) business
• Expansion of service offerings to airline customers

Negative

• None.

Insights

Financial Analyst

The acquisition of LMCES by FTAI Aviation is a strategic move that significantly expands their Maintenance, Repair and Exchange (MRE) capabilities. This deal enhances FTAI's service offering, potentially leading to increased revenue streams and market share in the aircraft engine maintenance sector. The combined capacity of 1,350 CFM56 module overhauls and over 500 engine tests annually positions FTAI as a major player in the industry. However, investors should consider the integration costs and potential synergy realization timeline. The rebranding of facilities suggests a unified approach, which could streamline operations and enhance brand recognition. While this acquisition appears positive for FTAI's growth strategy, its financial impact will depend on successful integration and market demand for these expanded services.

Aerospace Industry Expert

FTAI's acquisition of LMCES is a significant development in the aviation maintenance sector. The CFM56 engine, targeted by this expanded capacity, is one of the most widely used aircraft engines globally, powering many narrow-body commercial aircraft. This strategic move positions FTAI to capture a larger share of the lucrative engine maintenance market. The addition of the Montréal facility complements FTAI's existing Miami operations, creating a robust North American presence. This geographical diversification could lead to operational efficiencies and improved service for airlines across the continent. The increased capacity for module overhauls and engine tests could potentially reduce turnaround times for customers, a critical factor in the aviation industry where aircraft downtime is extremely costly.

Market Research Analyst

This acquisition aligns with the growing trend of consolidation in the aviation MRO (Maintenance, Repair and Overhaul) market. As airlines seek to optimize their operations post-pandemic, there's an increasing demand for comprehensive, efficient maintenance solutions. FTAI's expanded capabilities position it to meet this demand, potentially leading to increased market share. The rebranding of facilities under the FTAI name suggests a unified market approach, which could strengthen brand recognition and customer loyalty. However, success will depend on FTAI's ability to integrate operations smoothly and leverage synergies between the two facilities. The company's claim of becoming the "unrivaled leader in MRE" is ambitious and will require careful execution to fulfill. Investors should monitor FTAI's performance in the coming quarters to assess the acquisition's impact on revenue and profitability.

NEW YORK and MONTRÉAL, Sept. 09, 2024 (GLOBE NEWSWIRE) -- FTAI Aviation Ltd. (NASDAQ: FTAI) announces the successful completion of its acquisition of Lockheed Martin Commercial Engine Solutions (“LMCES”), a 526,000-square-foot aircraft engine maintenance repair facility located in Montréal, Québec, from Lockheed Martin Canada. The completion of the acquisition strengthens FTAI Aviation’s Maintenance, Repair, and Exchange (MRE) business with the ability to provide additional maintenance services to airline customers.

The integration of LMCES’ maintenance capabilities with FTAI’s current maintenance capabilities at QuickTurn, in Miami, Florida, gives FTAI capacity to perform up to 1,350 CFM56 module overhauls and over 500 engine tests annually. Both facilities will rebrand as FTAI Aviation Canada and FTAI Aviation USA.

"Completing the acquisition of LMCES is a major step towards FTAI Aviation becoming the unrivaled leader in MRE. We look forward to continuing to serve our global customer base by providing readily available, flexible, high-quality power while savings owners and operators time and money," said Joe Adams, CEO of FTAI.

About FTAI Aviation Ltd.

FTAI owns and maintains commercial jet engines with a focus on the Maintenance, Repair, and Exchange (MRE) of CFM56 and V2500 engines. FTAI’s propriety portfolio of products, including the Module Factory and a joint venture to manufacture engine PMA, helps make CFM56 and V2500 engine maintenance simpler, more cost-effective, significantly faster, and more environmentally friendly. Additionally, FTAI owns and leases jet aircraft which often facilitates the acquisition of engines at attractive prices. FTAI invests in aviation assets and aerospace products that generate strong and stable cash flows with the potential for earnings growth and asset appreciation.

Cautionary Note Regarding Forward-Looking Statements

This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to expectations regarding FTAI’s ability to further enhance our MRE business, ability to provide additional maintenance services to airline customers, expected synergies across the shops and cost efficiency. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “target,” “projects,” “contemplates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this communication are based upon our historical performance and on our current plans, estimates and expectations in light of information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements, including, but not limited to, the risk factors set forth in Item 1A. “Risk Factors” of FTAI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and FTAI’s Quarterly Reports on Form 10-Q, as updated by annual, quarterly and other reports FTAI files with the SEC.

For further information, please contact:

Alan Andreini
Investor Relations
FTAI Aviation Ltd.
(646) 734-9414
aandreini@fortress.com

FAQ

What company did FTAI Aviation acquire in September 2024?

FTAI Aviation acquired Lockheed Martin Commercial Engine Solutions (LMCES) from Lockheed Martin Canada in September 2024.

Where is the acquired LMCES facility located?

The acquired LMCES facility is a 526,000-square-foot aircraft engine maintenance repair facility located in Montréal, Québec.

How will the LMCES acquisition affect FTAI's maintenance capacity?

The acquisition increases FTAI's capacity to perform up to 1,350 CFM56 module overhauls and over 500 engine tests annually.

What will the acquired facility be rebranded as?

The acquired facility will be rebranded as FTAI Aviation Canada, while the existing Miami facility will be rebranded as FTAI Aviation USA.

How does this acquisition align with FTAI's strategic goals?

According to CEO Joe Adams, this acquisition is a major step towards FTAI Aviation becoming the unrivaled leader in the Maintenance, Repair, and Exchange (MRE) business.