ORIX Aviation agreed in August to acquire aftermarket specialist AerFin for about $638 million, the clearest signal yet that aircraft lessors see more value in engines and components than in the airframes they sit on.

The Dublin-based lessor, which owns and manages roughly 230 aircraft, will buy 100% of AerFin from Danish private equity firm CataCap, according to AerFin. Neither party confirmed terms, though Japanese press reports valued the deal at around ¥100 billion. Closing is expected by the end of 2026, subject to regulatory approval. CataCap had held a majority stake since 2019.

AerFin, headquartered in South Wales with operations in Dublin, Miami and Singapore, buys, sells, leases and tears down aircraft, engines and used serviceable material. Its customer base spans several hundred airlines. The acquisition gives ORIX inventory management, component sales, repair management and part-out capability alongside its leasing book.

The deal follows a widening gap between lease rates and aircraft values. Appraiser IBA reported in late July that market lease rates for a 12-year-old Boeing 737-800 had fallen roughly 11% since their July 2025 peak, from $255,000 a month to $228,000. A 12-year-old A320-200 dropped about 13%, from $253,000 to $220,000. Values, however, haven’t followed rents down. IBA attributed the resilience to persistent demand for engines and scarce components, particularly given constrained MRO shop capacity.

That divergence implies the residual value in a mid-life narrowbody now sits in the powerplants and life-limited parts, not the airframe.

China Aircraft Leasing Group, the Hong Kong-listed lessor, made the same bet explicit. In August it raised its residual value assumptions for aircraft and engines from a band of 5 to 15% of original cost to 5 to 40%, citing sustained strength in market values, redelivery conditions and utilisation. Days later, CALC signed a memorandum of understanding with HAECO to develop an engine quick-turn, hospital repair and used-material platform in Hong Kong.

A listed lessor moving its residual ceiling from 15% to 40% has implications for the securitisation market. Asset-backed securities written under the old haircuts either understate their collateral or, if engine scarcity reverses, face a correction in the other direction.

Airlines are seeing the same scarcity from the cost side. Japan’s StarFlyer, which operates four A320neos alongside seven ceos, approved a ten-year lease of a single LEAP-1A26 spare engine from Engine Lease Finance Corporation in late August. Total payments will run to roughly ¥3.3 billion, about $22 million, commencing December 2027. An operator whose neos are barely three years old is paying for coverage that OEM spare pools and power-by-the-hour contracts were designed to provide.

The largest lessors are responding with scale rather than vertical integration. Dubai Aerospace Enterprise closed its $9.0 billion acquisition of Macquarie AirFinance on 29 July, lifting its owned, managed and committed fleet to around 1,000 aircraft. DAE now ranks third among lessors globally by fleet size. A 230-aircraft platform cannot compete on that basis. ORIX’s route is different: own the final stage of the asset’s life, where teardown margins and component pricing intelligence sit.

The risk for aftermarket buyers is timing. If LEAP and GTF durability programmes eventually deliver improved time on wing and OEM production rates recover, used-material scarcity eases. Lessor-owned teardown operations would then chase thinner feedstock across CFM56 and V2500 pools that, while long-duration, aren’t infinite. The first securitisation built on the new residual bands, when it comes to market, will show whether credit investors share the lessors’ conviction that engine value, not airframe value, underwrites the mid-life fleet.

Sources