A JETNET iQ industry forecast presented at EBACE 2023 predicted 7,000 turbine business aircraft are expected to retire by the year 2032.
Data also shows that the vast majority of decommissioned business jets are over 30 years of age. As an aircraft approaches three decades of service, its continued life is largely dependent on straightforward economics. Basically, when the cost of operation exceeds the cost of replacement, it’s time to consider retirement.
According to Skyservice Business Aviation president and CEO, Benjamin Murray, owners of these aging aircraft have options. Recently, Skyservice was accredited under the Aircraft Fleet Recycling Association’s (AFRA’s) Best Maintenance Practices for Disassembly to provide complete aircraft teardown for parts sales and recycling.
Headquartered in Toronto, Skyservice has 13 locations across North America and has been in business for nearly 40 years. Murray explained there are three integrated business streams within the company: fixed base operations (FBOs); aircraft management, charter and sales; and aircraft maintenance, repair and overhaul (MRO).
On the MRO side, “we saw there were quite a few aircraft in the marketplace that were struggling to get parts, with long lead times,” he said. “We also saw that some of the aging aircraft were becoming more difficult to maintain. In a lot of cases, the total value of the parts on their own – if certified and tagged properly – was more valuable than the entire airplane.”
Murray said Skyservice’s new venture offers sustainable solutions, addresses the current aircraft parts shortage crisis, and provides owners with a compelling return on investment for their retired aircraft.
“It’s not just the capital costs of owning the plane, but other costs, too, like crew training, insurance, hangar, and maintenance inspections,” he pointed out. “All to keep them airworthy… at some point, there is a case for teardown.”
He said Skyservice can help an aircraft owner analyze the condition of their plane and help them understand the costs they are incurring.
“We can give them two proposals: One, we would acquire the aircraft and part out the plane at our own expense; or two, for a flat fee we could do the teardown, tag the parts, hold them, and resell them through our sales channels.”
Murray explained the impetus for pursuing formal AFRA disassembly certification.
“I think getting certified is a testimonial to the way we conduct business. Skyservice always wants to do things at the highest standards, and we wanted to understand what best in class would be considered.”
He added that over the past year-and-a-half, the company has performed many third-party teardowns and noticed how fast the harvested parts were absorbed by industry.
Most of the teardowns performed so far have been done at the company’s Toronto facility, although there are plans to shift some of these projects to the Muskoka location, which has more available space. Although Skyservice has dismantled a few commercial aircraft, “our preference is to stay in the business jet sector.”
With the entire aviation industry focused on sustainable operations, Murray noted Skyservice’s aircraft teardown and recycling program makes good environmental sense.
“Recycling is nothing new – we’re not the first to do it,” he said. “The difference is we’ve taken it up a notch to create a process for it, and we pay high attention to the quality of the parts. Any time you are tearing down a plane, you have to take responsibility that the parts coming back into the ecosystem are checked and airworthy.”
Skyservice inspects all parts, certifies them as airworthy, tags them, and returns them to the marketplace through an inventory listing service. Anyone who buys a part receives a thorough history, from manufacture to present day.
Murray said Skyservice is serious about maintaining parts quality and considers itself “an accountable partner to other MROs and aircraft owners. We err more on the side of scrapping a part rather than putting a marginal part back into circulation. When people buy parts through Skyservice, it’s very rare that a part is ever sent back to us because it’s not functioning right.”
Recently, Skyservice has begun to search out aircraft that might be costing more to fly than to retire – and correlating them to the makes and models for which there is a high demand for parts.
“Let’s say there is a 35-year old plane that’s been on the market for a while and the owner has written it down to nothing,” said Murray. “But they are still paying to maintain it. We can take that plane to our facility and start harvesting the parts and put them into our inventory. That owner is released from the carrying costs on the plane and any liabilities, and they have a new revenue stream. We can evaluate end-of-life solutions to provide greater options for clients.”
To develop this arm of the business, Skyservice is performing market research, investing more in parts sales, and tasking its business development team to have more consultative discussions with aircraft owners.
“I think it’s important that as an airplane ages, the aircraft owner can call Skyservice as a trusted adviser on the economics of continuing to keep it airworthy, versus retiring it and monetizing the value of what’s there,” concluded Murray.
“The main thing is, there are options. It’s a global market for parts now, and you can still receive quite a bit of income by thinking about the disposal of your airplane a bit differently.”
