Airplane parts recycling booms as airlines wait on new jets

COOLIDGE, Arizona – From engines to landing gear, the hunt is on for aircraft parts as airlines prepare their jets for swarms of summer travelers, with new planes from Boeing and Airbus still in short supply.

The search for parts leads some aircraft owners here, where older, retired planes are stripped for parts that will be prepared to fly on other planes or repurposed altogether. Some parts can be turned into high-end furniture, like $42,000 desks. What’s left can be crushed into scrap and melted down.

Until they’re picked apart, the planes are stored in arid climates, like the Arizona desert, to avoid damaging weather and humidity.

The used-parts business was worth about $3 billion to $5 billion before the pandemic, according to Mike Stengel, a principal at AeroDynamic Advisory. It’s now riding a boom in global aircraft maintenance, repair and overhaul, an industry that is set to expand 22% this year to $94 billion, consulting firm Oliver Wyman estimated in a report in February.

The current demand for aircraft parts is the result of the industry’s deep demand swings resulting from the Covid pandemic. In an effort to cut costs when demand collapsed amid travel restrictions, airlines raced to retire planes, only to need aircraft later when demand returned. Carriers also deferred maintenance and prioritized using engines with more time left on them.

Meanwhile, Boeing and Airbus are still trying to stabilize their supply chains and train workers after thousands left the industry during the pandemic’s slump.

One challenge is locating feedstock of aircraft. Travel demand is recovering — the International Air Transport Association last week said global air traffic is nearly 85% recovered to 2019 levels. In the U.S. it’s already past that point.

With deliveries of new jets behind schedule, airlines are holding onto planes longer, repairing or overhauling them, adding to demand for parts and labor.

Last year, 273 commercial jets were retired, the fewest in almost two decades and half the number in 2019, said Aerodynamic’s Stengel, citing data from the Centre for Aviation.

“There are supply chain issues across the aviation industry at the moment where these highly valuable parts made out of often-rare and precious materials can’t be produced quick enough,” said Lee McConnellogue, chief executive of ecube, a U.K.-based company that provides “end-of-life” services for aircraft. “So airlines and maintenance companies alike have to find an alternate source other than brand new.”

Ecube recently expanded, opening a facility here adding to its portfolio that includes Spain and Wales. The new site features a crush pad where old planes are shredded before being carted off.

“Engine shops are really full,” said Rob Morris, global head of consultancy at aviation data firm Cirium. “Used material’s in demand.”

Morris said that’s also driving up the prices to rent engines. For example, a CFM56 engine that powers some older models of the Boeing 737 is renting for $65,000 a month, up from $55,000 a month last year.

Boeing and Airbus executives are planning to pick up the pace in production and aircraft deliveries this year, however, which could boost plane retirements and in turn add to supplies of used parts and drive down the price.

“There are a couple of stars that have to align for the retirement floodgates to accelerate, and one big one is Airbus and Boeing being able to consistently deliver aircraft according to schedule — and for airlines to believe them,” Stengel said.