Teardown Company Expects Final Aircraft Decisions By End Of April Or May

With large cuts in capacity and little expectation of a quick and full recovery, commercial aircraft are headed for one of four fates: temporary storage, long-term storage, cargo conversion or disassembly for parts.

Although there is a general tendency to hang on to new, fuel-efficient narrowbodies and mid-sized jets, it is far from clear now which portions of which other fleets will reach each of those destinations. But companies in the storage and disassembly business are already preparing for larger volumes.

Aircraft-End-Of-Life Solutions buys end-of-life assets, disassembles them in the Netherlands and brings components to market. “Short term, everything will be parked, no end-of-life decisions being made,” predicts Derk‑Jan van Heerden, AELS CEO and founder.

Van Heerden expects end-of-life decisions to be made in a month or two. “Don’t forget that any lease return requires a process that can take several months of negotiations, maintenance to match the return condition and records sorting.”

The split between storage and disassembly will be based on aircraft type and age. “The older the aircraft the lower the chance of them coming back,” van Heerden says. “Also, aircraft types that already had a lack of popularity will not come back, four-engine widebodies and MD80s as examples.”

Less predictable will be the fates of smaller types of certain models, such as Airbus A319s and Boeing 737-700s. The AELS exec says the market was losing interest in these smaller narrowbodies before the traffic collapse, but lower demand might change that.

At the end of March, van Heerden was only seeing aircraft deals that had been in the bidding process or final rounds failing to be closed.

“The market needs to digest the current situation first and get an indication on when and how things might come back. Everybody is now busy getting a picture of where they are with their customers, airlines with passengers and lease companies with airlines. Deciding to scrap an aircraft is one you can make only once. So it make sense to only make those decisions with a picture of how the market is and will be in the years to come. Nobody has that at the moment.”

Sven Daniel Koechler, founder of Aircraft Solutions, is expecting to recycle more aircraft, although he knows that most grounded planes will be stored, not scrapped. His company was already planning to open the largest disassembly facility in the world in 2021. “It will recycle up to 70 aircraft a year,” Koechler says. And he emphasizes he will be able to recycle up to 96% of an aircraft, not just strip the best parts for resale and sell the rest as scrap to China.

CAVU Aerospace does both storage and disassembly. In mid-March, CAVU announced it had increased capacity for short-term and long-term storage, maintenance and dismantling at its facilities in Roswell, New Mexico, Victorville, California, and Stuttgart, Arkansas.

The company expects increased demand for both storage and maintenance and says it can provide disassembly either at its own facilities or with mobile teams at a site chosen by aircraft owners.