ITOCHU Corporation is buying a minority stake in IAG Engine Tech, the engine maintenance company Iberia set up in Madrid this year. Iberia announced the agreement on 27 October 2026 and expects it to complete in early 2027, subject to approvals. IAG keeps control, and the shop adds CFM LEAP work to its existing CFM56, V2500 and PW1100G-JM (GTF) business when it starts trading in early 2027.
Neither company has published the size of the stake or the price. What is public is the shape of the business and the reasons each side gives for the deal.
What is IAG Engine Tech?
IAG Engine Tech, S.L. (IET) was set up in 2026 as the specialist engine maintenance business within International Airlines Group (IAG). It takes over the engine work built up over more than 50 years by Iberia Maintenance and will operate from the La Muñoza facilities in Madrid, Spain. Its chief executive is Max Schramm.
IET will look after the narrowbody engines of IAG’s own airlines and will also sell shop capacity to outside operators and owners. Iberia says it wants IET to become one of the world’s leading engine maintenance providers. Marco Sansavini, Iberia’s chairman and chief executive, ties the project to the transformation of the maintenance business set out in IAG’s Flight Plan 2030.
Which engines will IAG Engine Tech overhaul?
IET covers four engine families: the three that Iberia Maintenance already handles, plus the CFM LEAP from early 2027:
| Engine | Main aircraft |
|---|---|
| IAE V2500 | A320ceo family |
| CFM56 | A320ceo family, 737NG |
| Pratt & Whitney PW1100G-JM (GTF) | A320neo family |
| CFM LEAP (from early 2027) | A320neo family, 737 MAX |
The LEAP work comes under the CFM LEAP Premier MRO licence that IAG secured in April 2026. Iberia says the licence puts IET among eight authorised LEAP maintenance providers worldwide, and that it expects the LEAP to account for about 70% of the single-aisle market by 2035.
Why is ITOCHU buying into IAG Engine Tech?
ITOCHU describes the deal as its first entry into narrowbody engine MRO. The Tokyo trading house already leases aircraft to IAG and Iberia and runs aircraft and engine aftermarket businesses. It sees the IET stake as a move further down the value chain, in line with its management policy that profit opportunities are shifting downstream.
Its case rests on the new engines. ITOCHU expects maintenance demand for the LEAP and GTF, which have powered new narrowbodies since 2016, to rise sharply and overtake demand for older engine types by around 2030. Iberia, for its part, gets a partner with capital and an international customer network to help sell third-party work.
What the IAG Engine Tech deal means for lessors and engine owners
Shop slots for new-generation engines are scarce. On 27 October we set out why MRO demand stays strong into 2027 even as deliveries recover, and in September we looked at who controls the engine shop queue. An airline-owned shop that takes outside work, with a lessor-trader on the share register, adds one more route to LEAP and GTF capacity in Europe.
There are three points to watch. The first is how much of La Muñoza’s capacity goes to IAG’s own fleet and how much to third parties once LEAP work starts. The second is whether ITOCHU’s leasing relationships bring engine owners to the shop. The third is pricing: a new Premier MRO entrant could ease slot pressure on LEAP shop visits in Europe, though the size of that effect depends on how quickly IET builds LEAP throughput after early 2027. The move also follows other lessor and investor moves into the aftermarket, which we covered in the ORIX and AerFin shift.
Frequently asked questions
What is IAG Engine Tech? IAG Engine Tech, S.L. (IET) is an engine maintenance, repair and overhaul company set up in Madrid in 2026 by Iberia, part of International Airlines Group (IAG). It builds on more than 50 years of engine work at Iberia Maintenance and begins operating in early 2027 from the La Muñoza facilities in Madrid.
How big is ITOCHU’s stake in IAG Engine Tech? It is a minority stake. Iberia and ITOCHU announced the agreement on 27 and 28 October 2026 and have published neither the percentage nor the price. IAG keeps a majority shareholding through Iberia.
When will the deal complete? Iberia expects completion in early 2027, subject to the necessary regulatory approvals and consents.
Which engines will IAG Engine Tech maintain? IET covers the IAE V2500, CFM56 and Pratt & Whitney PW1100G-JM (GTF) families, and from early 2027 adds the CFM LEAP under the CFM LEAP Premier MRO licence that IAG secured in April 2026.
Why does ITOCHU want an engine shop? ITOCHU says the deal is its first entry into narrowbody engine MRO and extends its existing aircraft leasing and aftermarket business. It expects maintenance demand for LEAP and GTF engines to overtake demand for older engine types by around 2030.
Talk to Boston Warwick
Boston Warwick advises lessors, investors and airlines on aircraft and engine transactions, including maintenance condition, shop visit planning and residual values. Our due diligence work covers CFM56, V2500, LEAP and GTF assets. Contact us to arrange a call.