APOC Aviation Adapts CFM56-5A Strategies As Market Faces Regional Shifts

Aftermarket trading and leasing specialist APOC Aviation is relying on structured assessment methods, selective teardowns and tighter partnerships with used serviceable materials suppliers to navigate the CFM International CFM56-5A market, which it says is marked by regional demand shifts, limited supply and evolving maintenance strategies.

In July, APOC signed a 12-month green-time lease agreement for a CFM56-5A with Hamburg-based operator Condor.

“At APOC, we’re seeing very few serviceable -5A engines coming to the market," observes Bruce Ansell, technical manager of the company’s engine division. “The operators are chasing availability, or potential availability, well in advance.” He also sees teardown opportunities monthly, driven mainly by challenges in sourcing spare parts and service providers’ shutdowns of -5A maintenance lines.

Most operators opt for green-time leases due to their eased lease-end conditions, which help avoid costly shop visits and the risk of incurring additional rental charges during prolonged returns.

Ansell notes distinct trends in CFM56-5A lease rates and used material (USM) component pricing over the past 12-18 months. Lease rates have fluctuated sharply with shifting demand; after climbing by 80% over the past 18 months due to reduced engine availability, rates have since settled to an increase of around 15%.

“This high fluctuation of lease rates can make this a volatile market for investors,” Ansell says. He further notes that the USM pricing is variable due to -5A specific components being out of production and the commonality between other CFM56 models. “The out-of-production pricing is now at a level whereby lessees and lease rates have to be found and agreed prior to any [serviceable] arrangement.”

When it comes to teardown activity, Ansell says -5A engines removed from service are generally affected by gas path deterioration and expired life-limited parts. “We are seeing plenty of serviceable parts from some modules, with a high possibility of [beyond economic repair] and scrap in other areas of the engine,” he notes. This means that, while some modules yield usable parts, other sections of the engine are likely to be either scrapped or deemed uneconomical to repair, reducing the overall value recovered from the teardown.

APOC Aviation employs a structured assessment model to evaluate the economic viability of returning CFM56-5A engines to service.

When engines are coming off lease, APOC evaluates them using this model to determine whether to refurbish and re-lease them or to tear them down for parts.

In some cases, APOC opts for a module-based teardown, selectively disassembling only those sections of the engine that can yield serviceable components, rather than performing a full engine teardown. This approach improves cost efficiency and allows targeted recovery of high-demand parts.

“APOC, as well as other -5A lessors, try to maintain some stock of the scarcest parts, or maintain contact with those USM providers we know to have stock,” Ansell says.

APOC’s projections for CFM56-5A demand beyond 2025 indicate that market activity remains highly sensitive to political and technical factors. Ansell says demand for the engine type dropped drastically in North America this year due to “political fallout” and its effect on operators; however, it is not immediately clear if this refers to any regulatory shifts or restrictions. Reliability issues with newer engines have also led operators in Europe and Asia to extend the life of CFM56-5A-powered Airbus A320 fleets, offsetting the decline.