On March 13th, Bank of China Aviation made an announcement that it had selected IAE V2500 engines for an order for 12 A320s. We decided to look into this engine selection and evaluated this growing lessors A320 family engine selection over the years. The company has 124 A320-Family aircraft in its fleet.
As the next chart illustrates, BOC has been a loyal P&W customer for some time now. BOC has been a steady purchaser of the A320 family over the years. With each passing year the company has become ever more loyal to P&W and its IAE engines. The pie chart illustrates the A320 family breakdown at BOC.
This is in stark contrast to the rest of the aviation industry and its engine selection over the years as the following charts for other major lessors demonstrates.
Across the market, among the A319s CFM has an average 67% market share. On the A320, CFM has an average 57% market share.
Next let’s take a look at some of the big lessors and see how their A320 family fleets look.
AerCap is an industry giant, with $44bn in assets and 1,300 aircraft. They have 117 A320 family aircraft in their fleet. If one adds those in the fleet and on order, the number grows to 691 and the firm manages 59 for other investors. The chart suggests that AerCap is CFM oriented with 65% of its selection going to CFM.
Next let’s look at Air Lease Corporation. This is a brand but is made up of a team that has a long history in the business. Run by Steven Udvar-Hazy, ALC is highly influential. The firm not only focuses on “bread and butter” aircraft like the A320 and 737 – it takes a view and position on larger aircraft under development such as the 787, A350 and 777x. The chart suggest that ALC is IAE oriented in terms of their A320 family engine selections, with IAE at 72% of orders.
Next we look at CIT, another large firm with substantial influence. Like ALC, CIT is a leader in that it too influences and selects aircraft under development – such as the A320neo and A330neo. CIT has been a long time A320 family investor. The chart shows CIT is IAE oriented with 66% of orders being for IAE.
Finally we look at another leasing giant, GECAS. This is an interesting firm to view because, not only is it big, it is also part of General Electric which makes engines and is a partner with SNECMA of France in CFM. Consequently the chart below should be no surprise, with 99.5% CFM engines at GECAS. Where an engine choice exists, GECAS is going to always support the home team. GECAS even supports programs that look commercially “iffy” such as the C919 because it has GE engines.
When looking at the engine selections one might think that GECAS has a large influence. In fact, looking at Airbus O&D data, as shown in the table below, this is not the case. GECAS may be an important customer, but it is not a compelling A320 family customer whose engine selections could influence the market as a whole.
The following chart lists the current operational A320 family fleet worldwide, by model and breakdown. The larger the family model becomes, the greater is the amount of share held by IAE. Overall for the entire family, CFM holds a 56.3% market share.
As we have seen among the leading aircraft lessors, BOC is not being radical by selecting IAE engines for its A320 family aircraft. Apart from GECAS, many of the leading lessors have relatively equally weighted portfolios, or lean slightly towards IAE.
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