Hear more from Ambalik during the main stage panel ‘Maintenance as a Strategy: How is MRO Pressure Reshaping Asset Management?’

InAMP Aero operates across both the parts trading and asset management sides of the industry. How much has the MRO capacity crunch changed the way airlines and lessors approach engine material sourcing, and are you seeing that shift the balance of power in negotiations?

As a parts supplier, the biggest change is who's buying and what they're asking for. Airlines and lessors that never touched surplus material five years ago are now serious USM buyers, because a shop visit built around new OEM parts is both slower and dramatically more expensive. When a full CFM56-7B visit runs five to seven million dollars, serviceable used material is often the difference between an economic workscope and one that isn't. USM went from a cost-savings play to a turnaround-time play. The first question we get is no longer price, it's "is it tagged, is the trace clean, and is it on the shelf."

On negotiating power, the leverage sits with whoever holds serviceable inventory in the shortage categories. On the CFM56 right now that's the hot section, HPT blades especially. If you own that material with clean paperwork, you're not really negotiating, you're allocating. But the constraint runs the other way too: we can't buy what doesn't exist. Feedstock is scarce and expensive because everything that can fly is flying, so traders are competing hard upstream for teardown assets and whole engines. The margin in this business has moved from the sale to the sourcing.

With shop visit slots relatively scarce, how are lessors and airlines deciding which aircraft and engines to prioritise, and what does that mean for the residual value of assets that can't get to the front of the queue?

What I can tell you is what the parts market sees, because every one of those decisions shows up in our order book. The engines getting full restorations are the ones on critical tails or hard deadlines. Everything else is being managed to condition, and that's driving a boom in the light workscope: module swaps, hospital visits, green-time LLP replacements. The whole point is to buy time without buying a full shop visit, and every one of those solutions is built out of used material. That's the aftermarket's moment. We're not the cheap alternative anymore, we're the supply chain that keeps the queue moving.

For the asset at the back of the queue, here's the trader's view: it doesn't lose value, it changes form. An engine that can't economically reach a shop becomes feedstock, and part-out values on CFM56 and V2500 material are exceptional right now precisely because so few engines are being torn down. The disks, the blades, the LLPs with real cycles remaining, that material is worth more disassembled today than a lot of owners realize. The engine is worth the sum of its parts, and right now the parts are winning.

The Ishka Airfinance Singapore audience knows aircraft finance well but MRO is often treated as a back-office concern. What's the one thing you'd want lessors and investors in the room to understand about how maintenance pressure is now directly affecting asset values and returns?

That your asset's value now depends on a parts market most of you have never priced. The appraisal says the engine is worth X, but realizing X requires a shop visit, and the shop visit requires material that may not exist when you need it. Turnaround times aren't long because shops are lazy, they're long because engines sit half-assembled waiting for parts. So when you underwrite a transition or an end-of-lease event, underwrite the material path, not just the reserve balance. Who supplies the hot section? Is it new OEM at list price and a long lead time, or is there USM available, and does your maintenance agreement even allow it?

And one more thing from the trading side: the paperwork is the part. After AOG Technics, material without airtight back-to-birth trace is getting progressively harder to sell no matter how good the metal is. If you own inventory or you're taking material in a redelivery, documentation quality is a real component of the value. We slim, verify, and rebuild trace packages every single day because that's what makes material liquid.

Hear more from Nadeera during the main stage panel ‘Maintenance as a Strategy: How is MRO Pressure Reshaping Asset Management?’

When a lessor prices an aircraft lease, what MRO factors do they most commonly underestimate?

From an airline engineering perspective, the biggest gap is that MRO is still treated as a static financial model, when in reality it is highly dynamic and operationally sensitive.

The first area that is underestimated is engine shop visit variability. While lease pricing typically assumes standard intervals and costs, actual engine maintenance is heavily influenced by operating conditions such as environment, cycle/hour ratio, and utilisation profile. Small deviations in these assumptions can materially change both timing and cost of shop visits, making maintenance reserve modelling inherently uncertain.

Secondly, lessors often underestimate the complexity of maintenance reserves and recovery mechanics. While reserves are designed to protect asset value, in practice:

• Reimbursement depends on documentation quality,
• Eligibility rules differ by lease,
• And timing of cash recovery rarely matches airline cash outflow.

This leads to a real mismatch between accounting assumptions vs. operational reality, often creating cash flow strain for operators.

Finally, lessors tend to underestimate the non-routine work scope risk. A shop visit is rarely just a “planned event”  findings, LLP replacements, and material condition variability can drive costs significantly beyond modeled assumptions

The parts shortage is well-documented at a macro level - but what does it actually mean today for a carrier like SriLankan Airlines?

At a macro level, parts shortages are discussed in terms of supply chain disruption — but for an airline, it translates directly into operational, financial, and strategic constraints.

First, it means longer turnaround times (TATs). Engine and component repairs are increasingly delayed due to piece part availability and labor constraints, which directly impacts fleet availability and reliability.

Second, it results in aircraft-on-ground (AOG) risk and forced operational inefficiencies. Airlines are increasingly:

• Leasing spare engines / landing gears at higher cost
• Cannibalising parts from other aircraft

This is driving a structural increase in operating costs across the board.

Third, it fundamentally changes fleet strategy. Because of delayed aircraft deliveries and limited parts availability, airlines are forced to retain older aircraft longer, which increases maintenance burden and cost exposure.

Fourth, from a commercial standpoint, it shifts risk allocation. What used to be predictable shop visit cycles now becomes: uncertain induction timelines + extended shop visits + higher material escalation.

“For us, parts shortage is not a supply chain issue – it is a fleet availability issue, a cost issue, and in some cases, a schedule integrity issue.”

The Singapore event will gather financiers, lessors and aircraft operators. If you could ask your counterparties to change one thing about how they approach MRO when structuring a deal, what would it be?

The one change I would ask for is a shift from purely financial modelling of maintenance to integrated operational modelling. Today, most deals are structured around:

• Maintenance reserves,
• Fixed assumptions on shop visit timing,
• And standard redelivery conditions.

But the operational reality is far more complex. I would encourage counterparties to move towards: “Collaborative MRO risk-sharing rather than static risk transfer.”