Willis Lease Finance Corporation Strikes Deal with Pratt & Whitney for up to 15 New Engine Purchases in 2024
Willis Lease Finance (NASDAQ: WLFC) has announced a new agreement with Pratt & Whitney, a division of RTX (NYSE: RTX). The deal involves the purchase and leaseback of up to fifteen Pratt & Whitney PW1100G-JM GTF aircraft engines, valued at $363.9 million, to be completed by December 31, 2024.
The GTF engine boasts 17% lower fuel consumption, is certified for 50% Sustainable Aviation Fuel (SAF), and has been tested on 100% SAF. This transaction aligns with WLFC's commitment to decarbonizing commercial aviation.
This follows a similar transaction of 25 GTF engines in early 2021. The company integrates leasing with aftermarket services, aiming to grow its portfolio of environmentally friendly engines. More details will be discussed in WLFC's Q2 earnings call in early August.
- The deal valued at $363.9 million demonstrates significant investment and growth.
- The GTF engines offer up to 17% lower fuel consumption, appealing to environmentally conscious investors.
- The transaction aligns with WLFC's commitment to decarbonizing commercial aviation.
- The reliance on timely completion by December 31, 2024, imposes a tight deadline.
Insights
The announcement of Willis Lease Finance Corporation's deal with Pratt & Whitney to purchase and lease back up to 15 new PW1100G-JM GTF engines has several financial implications for the company. The transaction, valued at
Historically, such investments have proven beneficial for WLFC; their previous transaction with Pratt & Whitney in 2021 involved a similar purchase and leaseback strategy and has likely contributed to their revenue growth. The integration of more environmentally friendly engines aligns with the current industry trend towards sustainability, potentially enhancing WLFC's attractiveness to eco-conscious investors and clients.
However, investors should remain cautious of any potential risks, such as the depreciation of these high-value assets and the market demand for leased engines, which could be influenced by broader economic factors. The upcoming earnings call in August will be important for understanding the financial impact and future outlook in greater detail.
The purchase of the Pratt & Whitney PW1100G-JM GTF engines by Willis Lease Finance Corporation underscores a significant strategic move within the aviation industry. The PW1100G-JM is renowned for its efficiency, offering a 17% reduction in fuel consumption compared to previous models. This technology is expected to play a key role in the industry's shift towards more sustainable operations, particularly given its certification for use with 50% Sustainable Aviation Fuel (SAF) and successful tests with 100% SAF.
For WLFC, this move is not just about expanding their fleet but also about positioning themselves as a leader in the sustainable aviation space. As airlines face increasing pressure to reduce their carbon footprints, the demand for such fuel-efficient and environmentally friendly engines is likely to rise. This acquisition places WLFC at a strategic advantage, enabling them to cater to both the current and future needs of their clients.
However, the success of this initiative will depend on several factors, including the adoption rate of SAF within the industry and the overall market conditions. The regulatory environment and government policies promoting or mandating the use of sustainable fuels will also play a important role in driving demand for these engines.
From a market research perspective, Willis Lease Finance Corporation's deal with Pratt & Whitney reflects a proactive response to the growing demand for sustainable aviation solutions. The aviation industry is undergoing a transformation with a strong emphasis on reducing carbon emissions and WLFC's investment in Pratt & Whitney's GTF engines aligns well with this trend. The 17% lower fuel consumption and the capability to operate on Sustainable Aviation Fuel (SAF) will likely enhance WLFC's market positioning.
Moreover, WLFC's commitment to decarbonizing commercial aviation not only meets regulatory requirements but also caters to the shifting preferences of stakeholders, including airlines and environmentally conscious passengers. This strategic alignment can improve WLFC's brand image and client loyalty, potentially leading to higher market share and competitive advantage.
Investors should note that while the immediate financial outlay is significant, the long-term benefits could outweigh the costs, especially if the adoption of SAF accelerates. The ability to offer environmentally friendly leasing options could open new business opportunities and partnerships, further solidifying WLFC's role in the aviation sector.
COCONUT CREEK, Fla., June 25, 2024 (GLOBE NEWSWIRE) -- Willis Lease Finance Corporation (NASDAQ: WLFC) (“WLFC” or the “Company”), the leading lessor of commercial aircraft engines and global provider of aviation services, is pleased to announce that it has finalized a deal with Pratt & Whitney, a division of RTX Corporation (NYSE: RTX), for the purchase and leaseback of up to fifteen Pratt & Whitney PW1100G-JM GTF aircraft engines, with all purchases expected to occur by December 31, 2024. Pratt & Whitney’s GTF engine offers up to
“We are pleased to be supporting P&W and their customers with another innovative transaction,” said CEO Austin C. Willis. WLFC completed a purchase and leaseback transaction of 25 GTF engines with Pratt & Whitney in early 2021. “By providing efficient capital, while integrating our strategically aligned aftermarket service offerings, we continue to grow our portfolio, investing in more environmentally friendly engines,” shared Mr. Willis. “This effort supports our commitment to decarbonizing commercial aviation in line with our SAF initiative and we look forward to discussing this as well as our performance in our second quarter earnings call in early August.”
Willis Lease Finance Corporation
Willis Lease Finance Corporation leases large and regional spare commercial aircraft engines, auxiliary power units and aircraft to airlines, aircraft engine manufacturers and maintenance, repair, and overhaul providers worldwide. These leasing activities are integrated with engine and aircraft trading, engine lease pools and asset management services through Willis Asset Management Limited, as well as various end-of-life solutions for engines and aviation materials provided through Willis Aeronautical Services, Inc. Additionally, through Willis Engine Repair Center®, Jet Centre by Willis, and Willis Aviation Services Limited, the Company’s service offerings include Part 145 engine maintenance, aircraft line and base maintenance, aircraft disassembly, parking and storage, airport FBO and ground and cargo handling services.
Except for historical information, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties. Do not unduly rely on forward-looking statements, which give only expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include, but are not limited to: the effects on the airline industry and the global economy of events such as war, terrorist activity and the COVID-19 pandemic; changes in oil prices, rising inflation and other disruptions to world markets; trends in the airline industry and our ability to capitalize on those trends, including growth rates of markets and other economic factors; risks associated with owning and leasing jet engines and aircraft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; changes in interest rates and availability of capital, both to us and our customers; our ability to continue to meet changing customer demands; regulatory changes affecting airline operations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio; and risks detailed in WLFC’s Annual Report on Form 10-K and other continuing reports filed with the Securities and Exchange Commission.
| CONTACT: | Lynn Mailliard Kohler |
| Manager Corporate Communications | |
| lkohler@willislease.com | |
| 415.328.4798 |
FAQ
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