Video: Plane recyclers bet on parts boomAs COVID-19 grounds swathes of airline fleets, companies that profit from harvesting old jets for spare parts are seeing signs of a boom.
Editor’s note: The following is a transcript of the accompanying video. ©2020 Thomson Reuters.
Airlines may be going through unprecedented turbulence this year with entire fleets grounded, but earnings are taking off for companies that profit from dismantling aircraft. Such firms see new opportunities in the $50 billion business of maintaining and repairing jets. That’s particularly as airlines speed up the retirement of older planes.
“This is an Airbus 310 that we started the harvesting of parts,” [said] Ron Haber [who] runs Aerocycle — a Canadian company that dismantles and trades aircraft parts. He wants to buy grounded planes for the first time, rather than waiting for airlines to send old jets over for recycling.
[Haber said]: “For us it’s just accelerating our business to, you know, where we thought we were going to be in 2022 or 2023. So, for us it’s, you know, it’s — it’s sad to say, but it’s a great business opportunity for us.”
The fate of the world’s grounded planes is being closely watched by analysts. Some expect much higher demand for used parts as airlines try to lower costs. Such trade is currently worth about $3 billion a year, though a glut of used parts could depress prices. Another data firm predicts the number of planes dismantled for parts could hit 1,000 annually through 2023. That’s more than double the rate seen in recent years.