MAX KINGSLEY-JONES / LONDON
First second-generation aircraft to be broken up as owners struggle to redeem value
The continuing slump in demand for secondhand aircraft is forcing owners to take the drastic step of breaking up relatively young widebodies to salvage the scrap value from the airframes.
According to the Airclaims Case database, over 200 widebody aircraft have been permanently withdrawn since the beginning of 2001, and 500 more are idle. Most of the retired widebodies are first-generation types - Airbus A300B2/B4s, Boeing 747 Classics, Lockheed L-1011 TriStars and McDonnell Douglas DC-10s. However, scrapping of early second-generation widebodies - Airbus A310s and Boeing 767-200s - is now under way because demand is at an all-time low and values have plummeted.
Aircraft and engine leasing specialist XS Aviation has linked with AJ Walter Aviation to break a 16-year-old ex-Canada 3000 A310-300, and may scrap a second similar aircraft. XS has sold an 18-year-old ex-Air New Zealand 767-200ER to AJ Walter for scrapping and is leasing out the three sets of General Electric CF6-80 engines.
Until now, the A310s and 767s that had been scrapped were the lower specification -200s. These are the first of the increased weight, extended-range versions to be axed.
"We find it very difficult to determine the future values of aircraft in today's environment and there are underlying significant structural changes in the industry which will have an impact on medium/long-term aircraft values," says XS Aviation chief executive Stephen Rimmer. "We now acquire aircraft on the basis that if we cannot arrange a lease within three to six months, we will part them out."
Les Weal, chief analyst at UK consultant Airclaims, says: "This is further evidence that widebodies' useful lives, in their primary role, are shorter than conventional wisdom had suggested." He says the excess capacity has put widebody values under pressure, and recovery is unlikely until it is eliminated.
Source: Flight International
