Singapore Airlines aircraft Singapore Airlines

Not All Part-Out Endeavors Are Equal

Part-out work on superjumbo-size aircraft, notably the A380, might not be as lucrative, or even viable as first thought.

Printed headline: A superjumbo-size conundrum

The troubled Airbus A380, which entered into service in 2007, is perhaps one of the more intriguing entries in the part-out discussion. With many industry voices predicting the end of A380 production could be a possibility within a few years, discussions are increasingly centered on whether the superjumbo is a viable teardown option.

For some, it is not­—or at least not at this time. Jason Reed, president of Component Solutions Group at GA Telesis, which runs a sizable part-out operation, told the AP&M summit in London on May 29 that the company has already been offered two secondhand A380s to part-out recently but declined the opportunity.

Singapore Airlines

Meanwhile, Werner Aero Services is another company that has rebuffed offers to take four of the aircraft in the past year to part-out, says President and CEO Mike Cazaz. “They were offered to us at what I consider to be teardown pricing and definitely not as fliers but instead to be taken out of service,” he says. “The aircraft are serviceable, but the owners are so eager to sell them that prices are reduced. However, for us it remains still too risky, even at the lower price.”

That said, in early June, it was revealed that the Dr. Peters Group, the German owner of two A380s that were on-lease to Singapore Airlines up to 2017, would send the superjumbo aircraft for part-out before selling the components after failing to place them with new operators. 

Initial calculations by U.S.-based VAS Aero Services estimated that parts sales alone would generate approximately $45 million. Overall returns for investors are valued at 145-155%.

Aviation Week Fleet & Forecast data estimate the A380 aftermarket in 2018-27 will amount to $28 billion, of which 20% will emanate from component maintenance.

The largest portion of this share (36%) will be generated by engines. It is anticipated that the Rolls-Royce Trent 900s powering the two A380-800s going for part-out will remain on lease until next year before being sold in 2020. 

TAGS: Fleet
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