ITOCHU buys minority stake in IAG's new Madrid engine shop
What's the deal? Japan's ITOCHU CorporationDealroom has a profile for this one. Try Dealroom → has signed an agreement to take a minority stake in IAG Engine Tech, a Madrid-based engine maintenance, repair, and overhaul (MRO) company set up in 2026 by IberiaDealroom has a profile for this one. Try Dealroom →. The round marks ITOCHU's first entry into the narrow-body engine MRO market. Iberia, part of International Airlines Group (IAG)Dealroom has a profile for this one. Try Dealroom →, will keep majority control.
What's the endgame? IAG Engine Tech is turning Iberia Maintenance's established engine shop — with more than 50 years of experience — into a standalone business serving IAG airlines and third-party customers. It begins operations in early 2027 at La Muñoza in Madrid. ITOCHU's investment is expected to close in early 2027, subject to regulatory approvals.
What's the money for? The deal brings capital, industrial expertise, and international reach, with a particular focus on winning external customers. ITOCHU built its relationship with IAG and Iberia through years of aircraft leasing.
What's the expansion? From early 2027, IAG Engine Tech will add LEAP engine maintenance under the CFM LEAP Premier MRO licence IAG secured in April. That will make it one of only eight MRO providers worldwide licensed to service LEAP engines, adding to its existing V2500, CFM56, and PW1100G-JM (GTF) capabilities.
Why now? Airlines are adding narrow-body aircraft to meet demand on short- and medium-haul routes. ITOCHU expects maintenance demand for LEAP and GTF engines — which power narrow-body jets introduced since 2016 — to overtake conventional-engine demand by around 2030. The LEAP engine is projected to account for roughly 70% of the single-aisle market by 2035.
"The incorporation of ITOCHU allows us to bring on board a partner with experience, investment capacity and a strong international presence," said Marco Sansavini, chairman and chief executive officer of Iberia.
The signal: The stake gives IAG Engine Tech an investor with aircraft-market reach as it chases work beyond IAG in a capacity-constrained market. Its payoff hinges on execution — ramping up LEAP capability and landing outside customers.
Read more: mrobusinesstoday.com
Image credit: CNE CNA C6F
