The commercial aircraft disassembling, dismantling and recycling market is expected to grow at a CAGR of 7.85 percent until 2032, according to a 2023 industry report – a significant hike on the CAGR of 4.80 percent forecast for the same period just 12 months ago.
According to the Commercial Aircraft Disassembly, Dismantling and Recycling Market Report 2023-2033, the value of the market, which stood at $5.95 billion in 2021, will grow to $14.35 billion by 2032. Its resurgence followed a 12.13 percent decline in 2020.
The figures not only reflect how the pandemic has accelerated the decommissioning of planes – the annual rate has grown from 460 over the past 35 years to 700 today, and by 2033, the International Air Transport Association predicts it will rise further to 1,100 – but also the increased interest in upgrading existing fleets.
Flying in the face of predictions they would accelerate the deactivation of most of their A380s following the 2021 decision by AirBus to cease production of the jumbo jet, Emirates, British Airways and Singapore Airlines are busy retrofitting their existing planes.
According to Stratview Research, the low cost of USM is the “biggest factor behind the exponential growth in the market”. Its latest report expects the market to reach $9.5 billion by 2027.
Busy with retrofits
Emirates has just completed a $2 billion retrofit program to revamp 120 of its iconic A380s under the brand ‘Fly Better’. As well as refitting the planes with the latest interiors, the changes will offer customers more sustainable choices. The airline’s president Tim Clark promises the revamp will “deliver ever better experiences” to Emirates customers.
British Airways intends to spend hundreds of millions of pounds on upgrading its first, business and premium economy class sections onboard 12 A380s. Considered to be quite outdated, the timely overhaul was confirmed by chief executive Sean Doyle to The Sunday Times. It’s speculated BA might also change the positioning of its classes: at present, three different classes can be found on each deck.
Singapore Airlines took the decision to start refitting its 12 A380s in 2017, but it was somewhat delayed. The pandemic provided the airline with the window it was waiting for, and it has since refitted most of the fleet. The result is wholesale changes across its four classes: from touch-sensitive screens to the highest quality hand-stitched leather seating in first class.
Really positive future
In light of demand like this, Lee McConnellogue, the CEO of the teardown and part-out company eCube, told the Satair Knowledge Hub that he sees a “really positive” future for the USM market, explaining:
“We've been speaking to the parts companies, the lessors, the people who consume the parts, the MROs and the OEMs, and all of them predict a rise in demand for USM. There are a lot of reasons to be optimistic. But also we've really got to get it into the MRO chain as a credible, repeatable offering. And we've got to work harder with the OEMs to loop it straight back into their supply chain for all of their overall needs as well.”
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Tommy Hughes, the CEO of the parts provider VAS Aero Services, shares McConnellogue’s enthusiasm and said he’s also seeing a growing demand for USM:
“There's more acceptance of the USM market than ever before. We're seeing customers that may not have chosen a USM direction [before] but as they're faced with lower cost strategies and utilising older aircraft, they see the viable solutions associated with USM.”
New customers
Both McConnellogue and Hughes agree the industry’s financial difficulties during the pandemic put USM on the radar of those who haven’t used it before. McConnellogue explains:
“There are lots of operators who have used USM for a long, long time now, but what we're seeing now is the MROs coming into the space and trying to use USM as a good way to service their shops. And even the OEMs are coming back to parts companies and asking for us to part-out aircraft to service their needs.”
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Hughes added that the industry is more comfortable with USM than it might have been in the past:
“Recertification through OEM repair technologies and those types of things have generated the confidence to use more USM material and realise there's a lower cost advantage by getting recertified through an approved supplier.”
Sustainability angle
USM offers advantages to those looking to maximise their return on investment on older aircraft, as well as those looking to extend their initial provisioning packages when acquiring similar models.
As fleets approach their end of life, MRO tends to become less cost-effective – utilising USM can squeeze the last bit of revenue out of an aircraft. The salvage of older aircraft also has the potential to increase MRO production as well, as salvaged parts will still need to be checked through an MRO process before being offered on the used parts market.
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In addition to being an affordable and reliable alternative to original equipment, USM provides another benefit that McConnellogue thinks should get more attention:
“We really need to start valuing and realising the sustainability benefits of USM. We focus heavily on pushing new technology into the market that burns less fuel and might use a different type of fuel, but increasingly we've got to focus on what we throw away as well. The more we can use USM, the less we throw away.”
Hughes said that parts companies like his are under increasing pressure to prove their environmental credibility because of the industry-wide focus on achieving ambitious climate goals.
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VAS is accredited through the Aircraft Fleet Recycling Association (AFRA) and Hughes said that a focus on sustainability not only affects nearly every aspect of his company’s operations, but is also very much a priority of customers:
“We see it more and more every day – customers asking about our credibility associated with recycling efforts, how we manage to tear down our aircraft and manage material, and whether we are doing the right things for the environment.”