Aviation Technical Services’ (ATS) announcement that it has purchased a Boeing 767-3G5ER for teardown to increase inventory of available parts at its Dallas/Ft.

Worth component sales and inventory management facility signals a new business for the busy MRO and perhaps some hope that more plentiful and affordable supplies of used parts are at least on the horizon.

“Our ATS teardown strategy is designed with our customers’ needs forefront,” says Christopher Olds, ATS vice president for Ranger Asset Acquisitions and Trading. “The core platforms we are targeting are Boeing 737NGs and the Airbus A320 family of aircraft.”

ATS’s component repair sites in Dallas/Ft Worth and Seattle also benefit from 757, 767 and 777 component support programs. “Future growth platforms may include additional widebodies as well as regional aircraft as our business continues to evolve,” Olds adds.

Conservatively, ATS is targeting the acquisition of six aircraft assets in 2020, most likely a combination of entire aircraft, airframes and/or engines. In 2021, The MRO’s goal is to double this to 12 assets.

At current aircraft production rates, Olds sees a constant rate of aircraft retirements, rather than an upturn. Over the past five years, production of new aircraft has increased, and airlines have accelerated the retirement of aged aircraft such as Boeing MD80, 90s, 747s and 737 Classics. But these retirements have had only a “nominal” effect on aftermarkets, Olds observes. 

Once the MAX returns to service, now expected by Boeing sometimes toward mid-2020, “the period of time it takes to return to a normal schedule of retirements should be minimal,” predicts Brian Olsen, ATS president for Component Repair and Engineering Solutions. “We anticipate a return to the cycle of some aircraft transitioning straight to retirement and others to freighter conversions following just a slight time delay.”

On used part prices, Olsen emphasizes that ATS focuses on bringing more alternative solutions to customers. “Our expansion into aircraft teardowns provides many competitive alternatives, such as the throughput of used serviceable materials to reduce lead times during heavy maintenance visits as well as reducing component turn times for repairs and AOG situations.

Pricing of used materials will most likely follow the laws of supply and demand, but our new ATS model should help isolate customers from unexpected price increases.”

The Seattle-based MRO offers a broad array of value-added services and products to current and global customers through its in-house network of services, including heavy maintenance, airframe modification, component repair, aftermarket trading, PMAs and engineering solutions. “Our recent capability addition of aircraft acquisitions is a natural evolution and allows for efficiencies and overall competitiveness,” Olsen says.

ATS has made five strategic acquisitions in the component repair and aftermarket trading arena in the last five years to better position for future growth through aircraft acquisitions. “We are now able to target and internally service high-demand aircraft parts and create rotable inventory pools.”