Vallair.jpg Vallair

Vallair Opts To Keep Aircraft Flying Over Teardowns

The Luxembourg-headquartered company says returns are more attractive from sending aircraft back into fleets but engines is a hot market.

Trading and leasing company Vallair says it has increasingly opted to place aircraft back in the air rather than send them for teardown in the past three years as demand for second-half aircraft remains strong and outweighs the financial returns on parting-out aircraft

Vallair focuses solely on the Airbus A320 and Boeing 737 aircraft and conducts its teardown work in Chateauroux, France, rather than pursue teardown opportunities on longer and widebody aircraft.

Operator demand has in turn led to an increase in prices and competition for acquiring these aircraft, barring some exceptions, says Gregoire Lebigot, president and CEO of the Luxembourg-based company.

“We realized that these airframe teardowns weren’t generating enough profitability compared to putting the aircraft back in the air,” he says. “With the exception of maybe the top 25 parts taken from an airframe, it’s generally not enough to turn a profit on the whole thing.”

He believes aside from airline demand for aircraft, the teardown option represents a longer cycle compared to re-delivering an aircraft through a trading or leasing route. “The available fleet stock for teardown has also been reduced throughout the past three years,” he says. “Spare part demand is also reduced on early generations of the 737 and A320 while it is more economically viable to keep aircraft of say 10 years old flying.”

Tearing down aircraft and engines accounts for less than 10% of Vallair’s overall business, Lebigot estimates. However, he says compared to aircraft, the engine market is an altogether different story, leading Vallair to disconnect its airframe activities from its engine ones.

“Spare parts demand for engines is extremely high for engine types such as the CFM56 and the V2500”, he says. “The OEM simply can’t produce enough parts for these engine types."

Landing gears are also generating high demand, Lebigot says. "This mainly comes from airlines and repair shops but it also fulfills our own needs due to the growing number of aircraft we have on lease."

TAGS: Airframe
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