AerSale See Aircraft Retirements Up, But Used Part Prices Stable
AerSale’s aircraft operations in Goodyear, Arizona, and Roswell, New Mexico, are seeing a significant increase in demand for aircraft storage and disassembly services. “This is a trend largely expected to increase over the next five years as new aircraft deliveries accelerate,” says a spokesperson. “We also anticipate an increase in retirements once the 737 MAX re-enters service.”
AerSale is seeing retirements rise for Boeing 737 Classics and NGs, as well as 757s, 767s, 747s and 777s. On the Airbus side, retirements are up for A318s, A319s, A320s, A300s, A310s, A330s and A340s. “Disassembly of engines associated with these aircraft is in large part proportionate to aircraft retirements, although some engine variants are more frequently refurbished for return to service,” says the spokesperson. The refurbishment candidates are V2500-A5s, CFM56-5Bs and -7Bs, CF6-80Cs and PW4000s.
Despite the rise in retirements, AerSale is seeing used part prices largely holding steady. “Given that aircraft retirements have been declining over the past three to four years, there has been significant pent-up demand for used serviceable materials," says the representative. Only as more than half the fleet of an aircraft or engine model is permanently retired and the market becomes saturated with the lesser-demand used parts, is pricing likely to soften.
AerSale provides MRO, sales and leases of aircraft, engines and parts, asset management and engineering for mid-life aircraft, typically 10-25 years old. It says it is in a high-growth mode, positioned to rapidly expand services and products through organic growth or acquisitions. Organically, AerSale has developed a landing gear overhaul facility in Rio Rancho, New Mexico, certified by FAA in December 2019. It has acquired three companies in the past 14 months and is now reviewing several other opportunities.
AerSale is in the process of becoming a publicly held company.