Willis Lease Acquires JT-Power, Forms Aviation Materials Subsidiary

Willis Lease Finance said it has launched Willis Aeronautical Services (WASI), a new wholly owned subsidiary that will provide end-of-life solutions for aviation materials and services related to aircraft engines. In conjunction with the formation of WASI, Willis Lease acquired most of the assets and hired the team of professionals from JT-Power, a supplier of aftermarket material and services to the aviation industry. The new subsidiary will be based in the former JT-Power facility in Boynton Beach, FL.

“The launch of WASI positions Willis Lease at the forefront of providing end-of-life solutions for the growing supply of surplus aircraft, while solidifying its premier position in the engine leasing business,” said Charles F. Willis IV, chairman and CEO. “Vertical integration at aviation leasing firms, combining aftermarket sales and trading of engine material, is becoming commonplace in our industry, as demonstrated by Lufthansa Technik AG’s recent announced 15% investment in AeroTurbine, an end-of-life solutions subsidiary of International Lease Finance Corporation. We see this as an opportunity to better manage the full lifecycle of our assets, enhance the returns on our engine portfolio and create incremental value for our shareholders. We are pleased to welcome the JT-Power staff to our team and look forward to expanding our services to customers at both firms.”

Willis Lease acquired most of JT-Power’s inventory of aviation material and aircraft engine assets for a total consideration of $5.9 million. Included in the purchased assets are approximately $3 million in inventories. The purchase price was established by analysis of other similar transactions in the market, third party evaluations of inventory acquired, and a third party business valuation from a leading expert in the aviation industry. The transaction is expected to be accretive to earnings.

“Historically, we have paid third parties 20-25% of the remaining value of an engine to disassemble it and sell the parts,” said Donald A. Nunemaker, president. “Engine material has significant value, even after an engine can no longer be economically overhauled and used on an aircraft. The creation of WASI, coupled with JT-Power’s assets and experienced professionals, gives us the capability to better control the processes and the costs associated with managing, not just our own end-of-life engines, but also those of our customers.”

Industry veteran Ian McDonald, currently president of JT-Power, will become president of WASI and lead the new subsidiary. “Our services will be focused initially on narrow body and wide body engines consisting of CFMI, Pratt & Whitney, Rolls Royce, International Aero Engines and General Electric aircraft and engines,” said McDonald. “Having worked with the JT-Power team for many years, I am confident our expertise will complement the professionals at Willis Lease and help both companies offer customers more cost effective solutions for both engine leasing and aircraft fleet material needs, all in one place.”