Boeing will announce on April 9 that it is getting into the used serviceable material (USM) market. The move is a natural extension of being a manufacturer and a service provider, says Stan Deal, Boeing Global Services’ president and CEO, who adds that it gives customers further parts choices and helps the company best accommodate asset demand.
“Given the book of business Boeing has in buying and selling aircraft,” obtaining assets is a natural part of the business, he says, so now “we have multiple choices we can make.” If the aircraft market value remains high, “we can release [an aircraft] back into the market” with Boeing services paired with it, or the company can tear it down and fuel the parts and supply chain business, says Deal.
Boeing started prototyping the USM business last year by tearing down aircraft—starting with 777s--and testing parts demand and pricing. The full launch is now occurring.
Deal says Boeing contracts multiple third parties to complete the teardowns, depending on where it makes sense to do them. The teardowns are primarily done in the U.S. but he says future teardowns will be done where it makes economic sense.
“The great thing about Boeing doing this is that we can stand behind the quality pedigree of the parts,” and with its repair network, it “can ensure high quality” for the used material, says Deal. He says this combination gives airlines a choice between Boeing-backed new or used parts to meet an airline’s economic priorities for an asset.
Deal says Boeing would consider tearing down aircraft that it did not manufacturer for used parts supply and “we’re evaluating how far we go on engines.”
In addition to introducing the USM launch on April 9, Boeing also plans to announce three supply chain agreements. Aviation Technical Services signed a three-year spare parts agreement; Aviall, a Boeing company, signed a multiple-year agreement with Eaton Aerospace to manage an exchange pool of rotables; and Aviall will stock and sell Valcor Engineering’s products, which include an air separation module.