Second-hand Parts Market Booming.jpg Sean Broderick/AWST

Used Parts Market Booming

Cost-effective maintenance for mature fleets and their engines has led to an increasing reliance on used serviceable material.

News that CAVU Aerospace is to open its fourth aircraft dismantling facility--in Victorville, California--provides further evidence for the booming market in second-hand parts.

While low fuel prices and delivery delays to several new aircraft programs have tempted many airlines to keep older aircraft in service for longer, cost-effective maintenance for mature fleets and their engines means an increasing reliance on used serviceable material.

ICF estimates that the USM market will grow from about $4.5 billion in 2016 to $7.7 billion in 2026, which in turn will drive demand from parts providers for aircraft to dismantle.

The consultancy predicts 9,300 aircraft retirements in the next decade, of which about 4,000 will be Airbus A320 and Boeing 737 narrowbodies.

CAVU dismantled 79 aircraft across its three scrapyards in 2017.

At present the most prized USM are life-limited parts from CFM56-5A and -7B engines and, to a lesser extent, the IAE V2500.

This has led to strong demand from parts companies for those engines’ host aircraft, the A320 and 737 families.

Examples include a 10-year-old A319 acquired by Aerfin for teardown in 2017, and a 13-year-old A319 acquired by Touchdown Aviation for the same purpose.

Lessors are also getting in on the act, with China Aircraft Leasing (CALC) setting up its Aircraft Recycling International joint venture in 2014.

ARI was established to enhance CALC’s capabilities across the aircraft lifecycle, giving the lessor an outlet for its older aircraft.

ARI subsidiary Universal Asset Management has also acquired aircraft from other sources. In February it bought a portfolio of A340 equipment from Airbus Asset Management.

At first glance that might seem an odd choice given the A340’s unpopularity with airlines. However, the aircraft’s CFM56-5C engines, of which UAM bought nine, share numerous parts with the -5B.

Another sign, then, of the growing reach of the USM market.

TAGS: Components
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