SINGAPORE—Used serviceable material (USM) usage is growing in Asia-Pacific among end users, but the region faces challenges related to high costs, regulatory requirements and supply chain issues.
Adoption of USM in Asia-Pacific has been slower than in other regions over several decades. In recent years, however, several global suppliers have located in the region, according to a Sept. 16 panel on the topic of USM at MRO Asia-Pacific.
Regional regulatory constraints are directly influencing the procurement process of USM in China, which is viewed as operating under different contexts from the Asia-Pacific region in terms of USM procurement and distribution trends.
Winnie Wang, CTO and general manager of Xiamen Aircraft Leasing's technical and asset management unit, said selecting aircraft or engine assets for teardown is largely driven by market demand and financial considerations. In China, a teardown business needs a specialist Civil Aviation Administration of China teardown approval, while an MRO division will require a Part 145 capability issued by the Chinese regulator. “You have to upload the whole components as they appeared on the aircraft onto a system,” she said. “So far, it's just for the aircraft and there is no specific recognition so far for engines, which may be coming later.”
Another China-based panelist, Wilson Liu, vice president of procurement at Hainan Airlines, said the carrier obtains its USM parts from within China instead of overseas. From this year, he said the opening of domestic policies toward USM, along with a need created by China’s vastly expanding commercial aircraft fleet, is facilitating a more open procurement environment. The airline operates a mixed fleet of Airbus and Boeing narrowbody and widebody aircraft.
Outside of China, Malaysia-based Asia Digital Engineering (ADE), the MRO unit of the AirAsia Group, is also looking toward USM. “With the ongoing supply chain constraints and longer turnaround times, we’ve had to focus more on USM,” said Aziz Yunus, head of component and warehouse services at ADE. Yunus said ADE tore down one Airbus A320 last year and he sees a growing demand for USM across the region, citing lagging turnaround times and a lack of parts availability as drivers of this.
MTU Maintenance Singapore's Kevin Li said that given the scale of the company's operation, it views USM through a global lens rather than differentiating depending on region. “We have a centralized location for all the connection and repair of USMs,” he said. Li believes that there is generally a lack of capacity for teardowns across the world and more capacity is needed in the market. “We are looking for a global network of teardowns and facilities to harvest these materials,” he said. He added that the emphasis should be on operators and industry innovators to make the most of what is available with more efficient usage.
The panel emphasized the need for better standardization and improved coordination in the supply chain to maximize efficiency and cost effectiveness, with cost cited by Wang as a challenge for Xiamen Aircraft Leasing in relation to the input pricing of the use of material. “We have purchased assets, and the price is pretty big—but so is the cost for repair and the cost of the scrap rate during the repair,” she said. Wang used the example of repairing a high-pressure turbine blade for an IAE V2500 engine and the cost increasing around 50% compared to last year.
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