BAKU, Azerbaijan, October 28. Japan's ITOCHU Corporation has signed an agreement with Spanish airline Iberia to acquire a minority stake in IAG Engine Tech, a Madrid-based aircraft engine maintenance, repair, and overhaul (MRO) company established in 2026, the Japanese company said on October 28.
The transaction marks ITOCHU's first entry into the narrow-body aircraft engine MRO market and is expected to expand its presence across the aircraft industry value chain.
“IAG Engine Tech will serve the narrow-body engine maintenance needs of IAG airlines while developing a strong international third-party customer business,” ITOCHU said.
IAG Engine Tech was established by Iberia, a member of International Airlines Group (IAG), and builds on more than 50 years of engine maintenance experience and technical capabilities developed by Iberia Maintenance in Madrid.
The company currently has expertise in servicing V2500, CFM56 and PW1100G-JM (GTF) engine families. From early 2027, it plans to expand into LEAP engine maintenance under the CFM LEAP Premier MRO license secured by IAG.
“This marks a significant step into the fast-growing next-generation engine market and supports its ambition to establish itself among the world's leading engine MRO providers,” the company said.
ITOCHU expects demand for narrow-body aircraft engine maintenance to increase as airlines expand their fleets to meet rising passenger traffic on short- and medium-haul routes.
According to the company, demand for maintenance services for LEAP and GTF engines, which power the new generation of narrow-body aircraft introduced since 2016, is expected to grow sharply and surpass demand for conventional-engine maintenance by around 2030.
“Through years of aircraft leasing transactions, ITOCHU has built a strong relationship of trust with IAG and IBERIA, and this investment marks the natural evolution of that relationship into a strategic alliance from which all parties stand to benefit,” the company said.
ITOCHU added that the investment would build on its experience in aircraft leasing and the aircraft- and engine-related aftermarket business, as well as its established customer network, to support IAG Engine Tech's international expansion.
The investment also aligns with ITOCHU's management policy, “The Brand-new Deal – Profit Opportunities Are Shifting Downstream,” which focuses on expanding its downstream operations and increasing investment in growth sectors.
“ITOCHU will use this investment as an opportunity to enter a new domain within the aircraft value chain, strengthen its business foundation, and expand its global commercial aircraft business,” the company said.
