FTAI Aviation (FTAI) Barclays 18th Annual Americas Select Conference summary

Business overview and strategy

• Operates in three interconnected businesses: aerospace products (MRE), asset management, and power generation, all leveraging expertise in CFM56 jet engines.

• MRE business provides outsourced engine maintenance, offering faster and cheaper rebuilds, aiming to grow market share from 12% to 25%.

• Asset management business uses third-party capital to own and lease aircraft, making the company more asset-light and locking in long-term engine exchange contracts.

• Power business repurposes CFM56 engines as generators for data centers, targeting delivery of 100 units (2.5 GW) in 2027.

• All three segments reinforce each other, drawing on shared engineering and maintenance capabilities.

Market environment and growth plans

• Current airline market volatility has not materially impacted growth; slow fleet decision cycles and limited new aircraft supply support ongoing demand.

• Older technology engines remain attractive due to lower capital and maintenance costs compared to new models, despite fuel savings from newer engines.

• The company’s model offers airlines cost certainty, eliminates spare engine and logistics costs, and removes risk of maintenance overruns.

• Customer base is expanding to include larger airlines, with multi-year contracts and spot business both contributing to visibility.

• Physical capacity has doubled year-over-year, with new facilities in Rome, Miami, and Lisbon, and plans for further expansion in the Middle East or Southeast Asia.

Asset management and economics

• Asset management fund raised $6 billion, fully deployed by Q2, with a second $6 billion fund in progress.

• Custom engine builds for lease terms generate higher returns and lower risk by matching engine life to lease duration, reducing residual value exposure.

• Extensions beyond modeled lease terms provide additional upside; robust demand for CFM56 and V2500 engines supports asset values.

• Business is relatively insulated from asset value fluctuations due to efficient rebuilds, part-out value, and stable parts pricing.

• Market presence is significant but not market-moving; strong counterparty reputation aids in deal closure and sale-leaseback opportunities.