ST Engineering to enter freighter leasing JV

Shutterstock

MRO provider ST Engineering and Singapore state-owned investment firm Temasek are teaming up to establish a joint venture freighter leasing company in response to rising demand for freighters.

The new company will aim to build a portfolio of aircraft with a value of around $600m within five years, investing in passenger aircraft to be converted into freighters.

ST Engineering’s Aviation Asset Management leasing arm will equally-own the venture with Temasek.

ST Engineering will provide MRO services and will be the asset and lease manager.

The portfolio of aircraft will primarily comprise converted narrowbody aircraft. The company expects to be able to purchase the feedstock at lower prices as passenger aircraft value has been affected by travel restrictions arising from the Covid-19 pandemic.

The aircraft acquisitions will be financed through a mix of equity and debt.

“This joint venture represents a significant step by ST Engineering in growing our aviation leasing business as we expand beyond passenger aircraft and engines to include freighter aircraft assets as part of our portfolio,” said Jeffrey Lam, president and head of commercial aerospace, ST Engineering.

“As we embark on this exciting venture with our partner, Temasek, we also welcome and look forward to working with other potential like-minded partners who are looking to invest in the strong freighter aircraft leasing market. In the medium to long-term, the JV intends to securitise the leasing income streams by way of a business trust to unlock capital.”

According to its website, ST Engineering does already offer freighter leasing through its Aviation Asset Management business.

The company added that demand for freighters is on the rise as e-commerce and air cargo volumes expand across the globe.

ST Engineering is already a partner with Airbus in German-based EFW which carries out such conversion work, and is extending its modification capabilities to sites in Asia and North America.

Share this story

Related Topics

Latest freighter conversions/mro news

EFW and MRO Japan partner on A320P2F/A321P2F conversions

MRO Japan (MJP) and Elbe Flugzeugwerke (EFW) have formally signed a partnership that will see MJP provide third-party conversion services…

Read More

Share this story

First A321F for Azul as EFW gains Brazilian STC

Elbe Flugzeugwerke (EFW) has received the validation of its Supplement Type Certification (V-STC) for its Airbus A321 Passenger-to-Freighter (P2F) conversion…

Read More

Share this story

FAA certifies Embraer’s E190 freighter conversion

Embraer’s E190 converted freighter has been given a major boost by gaining certification from the US Federal Aviation Administration (FAA)….

Read More

Share this story

Damian Brett

Damian Brett
I have been writing about the freight and logistics industry since 2007 when I joined International Freighting Weekly to cover the shipping sector. After a stint in PR, I have gone on to work for Containerisation International and Lloyds List - where I was editor of container shipping - before joining Air Cargo News in 2015. Contact me on [email protected]