Aircraft Decommissioning
What happens at the end of an aircraft’s life?
By Chuck Marx, SkyThread Chief Strategy Officer
Note: this post is part of a 52-week series Chuck is posting about digital aviation. This post is Week 10.
Two Boeing 787 are about the find out. The global commercial aircraft disassembly, dismantling & recycling market was estimated to be worth $4.5 billion in 2019 by Fortune Business Insights and is projected to reach $5.4 billion by 2027, a CAGR of 7.4% (1) More than 16,000 commercial aircraft have been retired worldwide in the past 35 years, and more recently, some 700 aircraft per year are reaching the end of their operational lives. Over the next 10 years, craft retirements are expected to increase as COVID-19 accelerated fleet retirements. It was an industry changing event that triggered new planning scenarios on our aging fleets, including:
Future fleet sizing based on revised routing and passenger loads.
Accelerated replacement of aircraft to support environmental considerations.
Accelerated replacement of aircraft to leverage digital aviation capabilities.
Improved visibility to spares planning - lifecycle algorithms are obsolete.
Aircraft decommissioning is becoming an important industry process and must be properly managed to achieve all the goals. Aircraft decommissioning has economic, operational, regulatory, safety and environment implications. With process improvements already achieved, around 90% of aircraft parts can be reused or recycled, including the airframe, and components. Properly documented spare parts have high value. This means that if undertaken with knowledge of the full lifetime histories of the parts on that aircraft and engine, aircraft decommissioning can allow recovery of an improved residual value from re-used parts and recycled material, while also minimizing environmental and safety risks.
Boeing 787
The Boeing 787 aircraft platform has been in production since 2011 and found favor early on with its launch customer, ANA in Japan. Since then, over 1,000 aircraft have been delivered and over 600 remain in backlog. Under most metrics, that would be considered a successful aircraft platform. It’s a great plane to fly in as well. I’ve flown almost 5 million miles in my career, and this is a comfortable aircraft on long flights.
So why these two aircraft? And why now? Well, the pandemic did not help. Although the Aviation Week article on this important industry event did not name the tail numbers of these aircraft, they have been identified in this ThoughtCloud by Rob Morris, Global head of consultancy at Ascend by Cirium.
SkyThread’s Role
SkyThread for Parts is working tirelessly to build out the Global Parts Registry to capture the lifetime operational and repair history of each aircraft part flying today or staged for AOG and line support around the world. Over 100 million aircraft parts will fall into this view. SkyThread For Parts will support the efforts of the airframers, airlines, tier 1 parts OEM, aircraft hangars and parts repair centers, lessors and of course, aircraft and engine decommissioning centers. So, when the next planes pull into the decommissioning hangars, more will be known about the parts on those planes. Our vision to capture these aircraft parts histories while they’re flying today – as the decommissioning market accelerates to 1,000 aircraft per year, we’ll be seeing upwards of 2.5 million aircraft parts per year coming into the USM market. Over the next 10 years, we’ll see 25 million parts.
USM Markets
The USM market for Boeing 787 is not developed or tested, as the aircraft has just “settled in” to its operating cycles around the world and spares planning parameters are just being validated now. The aircraft still have minimal history coming out of an aircraft D check, which are designed to happen between 10-12 years of operation for this platform. In the table below, some 114 have gone through or will be heading into D checks, or lease returns. A “D check” on a wide body aircraft is a high-cost event - between $6 million and $10 million.
Rob notes – “Although there are relatively few 787-8 parked globally today, demand is also low and thus the aircraft head for part out to “maximize value from a streamlined post-disassembly supply chain”. Ascend’s Half-Life Current Market Value for a 2013-build 787-8 is $30 million. The equivalent part-out opinion ranges from $20 million (in the downside scenario) to $49 million in the base scenario. Plus, the powerplant. These two aircraft avoided their D check by moving straight to decommissioning. On older aircraft, parts with life histories will be worth more.
Other Wide Body Platforms
Other wide body aircraft have begun “end of life” considerations over the past four years. The Airbus A380 was discontinued as a platform in 2021 after shipping about 250 aircraft since 2008. The first A380’s were decommissioned in 2018 by Tarmac Aerosave, a very large aircraft storage, and recycling company in Europe. All useable parts are removed, cataloged, cleaned, and stored for sale. The final step in the process is to take apart the airframe itself, made mostly of aluminum and carbon fibers, for recycling. In 2020, an Airbus A380, a former Air France plane, landed at Ireland West Airport where it was disassembled by Eirtrade Aviation. The Boeing 747 platform the renown “Queen of the Skies” discontinued commercial production in 2021 after a 52-year run, producing over 1,500 aircraft.
Best Industry Practices for Aircraft Decommissioning
Most airlines and other aircraft owners have limited experience in managing aircraft decommissioning as a controlled process. This is why IATA developed guidance on managing aircraft decommissioning in a safe, economic, and sustainable way whilst meeting all relevant regulations - IATA - Aircraft Decommissioning. The manual covers all phases of the aircraft end-of-life process including -
Decision to decommission an aircraft and selection of facilities.
Disassembly and Dismantling processes
Parts distribution and recertification
How Does SkyThread Help?
We’ve built SkyThread for Parts to help the airlines, the technicians, the broker / distributor community and the Tier 1 parts makers work together as part of a bigger community to take care of each other and our planes. The annual parts ecosystem is large – over $30 billion a year just for the parts purchases / exchanges and over $70 billion a year for the total maintenance activities. But the level of inefficiency, waste and delay is tremendous, and the level of forensics work to find the right part is mind numbing.
SkyThread is providing the trusted data sharing network, enabled by blockchain, to bring forward the life history of an aircraft part to find the right part, for the right plane, at this moment to get this plane flying again. The life history is important, because there are no regulations requiring it to be provided. Therefore, we “get what we get”. SkyThread will provide more visibility to the “status” of the parts we have available, while not interfering with the existing part “offer / purchase” companies, processes and systems in place today. All these current enablers are like silos. You can only see what’s in the one silo, not all the silos. SkyThread is building the data to support:
Part # / Serial # on wing – what’s flying today and how long has it been there? – 60 million parts
Part # / Serial # on ground – which parts are “staged” and what status are they in? – 40 million parts
Part History – Part birth, 1st use of part (installed on aircraft), removal, repair, and installation history
Once we have a better handle on specific part # demand, we can do a better job of positioning and finding the right part for the right plane at the right place at the right time. No matter who you are, or where you sit in the value chain.
SkyThread for Parts
For more information on what we’re doing, see my SkyThread article series on LinkedIn. In the first week of the series, I included a history of how we’ve come to realize there is a better way to achieve what we call “Data for the Life of the Aircraft”. We’ve been working with blockchain (and other technologies) to develop ways to use blockchain to achieve the industry business needs for data transparency and trust. In the 2nd week of the series, I included a short post on “Lessons Learned in Blockchain”. Now we’re making progress and working with over a dozen companies around the world in their respective parts and plane ecosystems to achieve “breakthrough” results.