Aircraft Teardown – Nose to Tail

Just like every other machine an aircraft undergoes extensive wear and tear, given the extreme atmospheric pressure, manual handling, rough weather, and plenty of other factors. Although most of the aircraft undergo regular maintenance checks after each flight, there is a point beyond which an aircraft does not remain airworthy. Every year about 500-600 commercial passenger and freighter aircraft are withdrawn from service. Such aircraft either go into long-term storage or are disassembled. During this process, the aircraft engine and other components are removed and either returned to stock the current fleet or are made available for sale or lease for the owner to cash in on its asset value. Engines, turbine components, avionics, and landing gear all can be used as spare parts, and fuselage sections include recyclable metals like titanium, copper & aluminum.

The Teardown Market prediction

As per the Oliver Wyman predictions, the aviation aftermarket is slowly showing positive signs of recovery, the growth is expected to pick up steam in the second half of 2022. However, neither the airlines, aerospace nor the MRO sector is expected to catch up with pre-COVID projections by the end of the 10 years.

The early retirement of planes has reduced the sales of new parts because of increased competition from the surge in supply of used components and green-time engines harvested from retired aircraft. According to Oliver Wyman, it can take as much as three years to work through the excess of used serviceable material.

The A B & C of teardown

An aircraft teardown from nose to tail effectively takes about three to five weeks with roughly about 1000 harvested components.

The first stage of any teardown consists of sourcing aircraft whose component assets meet the needs of the marketplace.

The second stage is placing a successful bid for an aircraft followed by documentation and inspection. Certain parts that are to be returned and parts that are to be kept are logged separately. this process is vital for ensuring asset value and acceptability at the point of sale after teardown and recertification/repair as required. Next, the aircraft is thoroughly inspected along with all the records.

Once the purchase of the aircraft is complete, the fourth and final stage is the actual teardown. Suppliers like AJW will partner with a third-party teardown specialist. Choosing the right partner is vital due to the importance of the disassembly process. The selection is based on location, experience, cost, and a trusted network of teardown partners, mostly 145 approved.

The actual teardown of the aircraft starts with easily accessible components such as avionics (flight deck and avionics bay), safety equipment including slides, and lights as they are quick and easy to remove. Next comes the removal of APU and nacelle components due to the ease of removal and value to start the marketing and saleability of units as quickly as possible

Next comes the removal of hydraulic systems, LRU’s along with the brakes, and replacing the wheels to move the airframe.

Once the aircraft is stripped of all required LRU’s then the landing gear and wheels are removed.

The recycling process aids in the recovery of residual value from discarded aircraft components like carbon fibers. Carbon fiber has been more widely used in airplane components as a result of technological advances. The recycled material has a reduced-price tag. As a result, commercial airlines are emphasizing the use of recycled materials for different components and systems.

Aircraft might belong to either airline, leasing companies, banks, specialist investment funds, or parts trading companies once they are parted out. Mostly airlines account for only a small percentage of global part-out demand. Major operators will directly part out aircraft, typically when they are in the process of phasing out a particular type and are trying to minimize further spares investment in these aircraft. Banks and leasing companies may occasionally be customers in the part-out process. Parts trading companies probably own about 25% of the aircraft that are parted out. They also manage a large percentage of part-out projects on a consignment basis from third-party owners, which in most cases are specialist investment funds

Touchdown Aviation (TDA) is a parts trading specialist with experience in the part-out market. AJW Aviation is another parts trading specialist with experience in the part-out market.

AFRA or Aircraft Fleet Recycling Association

Established in 2006, AFRA is a membership-based global collaboration to elevate industry performance and increase commercial value for end-of-service aircraft. AFRA represents companies from across the globe and throughout the supply chain – from manufacturers to material recyclers. Through the collective experience of its members, AFRA’s BMP Guide has significantly improved the management of end-of-life aircraft in terms of environmental and sustainable performance. The AFRA accreditation contains a very clear set of recommendations and best practices for aircraft recycling.

The Narrowbody popularity

Currently, the popularity of narrowbody is on the rise mainly due to improved range capability and attractive seat mile efficiency making the narrowbodies choice of aircraft for LCCs. Since the opening of international borders for air travel, this trend is showing a steady rise. Anticipating this, many part-out companies started their preparations in 2021. APOC purchased four Boeing 737 airframes that have single operator traceability and were fully active until the COVID-19 pandemic.

Jasper van den Boogaard, VP Airframe Acquisition & Trading at APOC says that they will continue to secure investment for the right assets. APOC was quick to seize this multi-million-dollar opportunity last year as we had secure financing in place to close the deal. Despite the constraints of COVID-19, we are very pleased to have closed this important deal. As airlines seek to right-size their fleets to balance demand with new inductions, opportunities will emerge to divest certain assets. When multiple airframe deals are under discussion it is important for airlines and lessors to co-operate with like-minded partners, such as APOC, who understand the dynamics in today’s changeable marketplace. As airlines worldwide rebuild their operations narrowbodies will be the first to fly again continues Van den Boogaard. We will support our customers through the sale of parts but also exchange, loan, and consignment – whatever is best for them. Our proactive teardown program is designed to increase our stock of high-quality commercial parts, not just replenish, he concludes

Apart from this, APOC also opened a new warehouse facility in Miami to meet the expansion of its narrowbody inventory and consignment program as a part of its strategic plan to expand its global footprint.

Thus, if the part-out company had liquidity, they grabbed the opportunity with both hands and increased their stock of commercial parts.

AJW too was not far behind, they too predicted that with the re-opening of the market the demand for spares will rise by leaps, and hence they purchased three Airbus A330-200 aircraft for teardown.

C&L Aerospace, a C&L Aviation Group company, recently signed a multi-year agreement with Legends Airways to provide power-by-the-hour services for its fleet of Saab 340 B+ cargo aircraft. Along with the PBH, Legends committed to a supply agreement that includes rotables, engine LRUs, and expendables.

C&L Aerospace also heavily invested in additional inventory to meet customer demands last year with the purchase and teardown of 15 aircraft. The aircraft included are 2 E170, 9 ERJ 145, 2 Saab 340B+, 1 ATR72, and 1 Challenger 604. They also purchased a multi-million-dollar ATR spare parts purchase which consists of many consumables and expendables. Following this C&L build a 27,000 square foot warehouse on their Bangor campus to store parts from the above teardown projects.

Despite the market uncertainty over the past year, we are committed to continuing investing in the regional and corporate aircraft we support says Chris Kilgour, CEO of C&L Aviation Group. These inventories allow us to be preferred partners for our customers who rely on us to support their needs, he adds.

KGAR has a system called the ‘Smart teardown’ in which they outsource the teardown of aircraft at one of the teardown providers, and locate the stock where it is needed globally. Thus, they provide the customers with several options for readily available inventory.

In the COVID-19 recovery, USM is going to play a huge part in helping operators manage their cash flow more effectively. USM parts can typically cost only 60% – 80 percent of that charged by the aircraft OEM. In addition, supply chain impacts felt within the OEM are not felt within the USM market, the main barriers to USM parts are traced along with release certification. In the ongoing recovery from COVID-19 we see a number of aircraft being retired at a very young age – this lends itself to ensuring an ever-reliable supply of components to the market.

USM can assure timely and cost-effective running of an airline, supply chain integration is one part of a larger process which is key to giving access to inventory and managing all aspects of material supply, quickly & cost-effectively, all whilst reducing aircraft downtime as far as possible

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