MBSDALHOU
Topic Author
Posts: 57
Joined: Fri Mar 04, 2016 6:05 am

Aircraft scrapping question.....

Tue Feb 14, 2017 3:48 pm

So please forgive me if this has been discussed before. I couldn't find a direct answer to my question so here I go!
I was reading the news earlier and in the article I noticed a Scoot 777 had been virtually scrapped to almost nothing along with a lot of forgein operaters have their planes scrapped almost the second it lands! Then we have the US operators who still have numerous aircraft just sitting in the dessert. My question is why do the US airlines have their planes just sitting there vrs the forgein operators have theirs scrapped? Is it as simple as a leased vrs owned plane? Or is there something more to it? Any and all insight is always greatly appreciated!
 
diverted
Posts: 1247
Joined: Sat May 17, 2014 3:17 pm

Re: Aircraft scrapping question.....

Tue Feb 14, 2017 4:53 pm

It all depends.
Who owns the frame? If it's a lessor they may have it sold before it's even returned from the lessor. Also depends on the nature of the parts market. For example the 777's, an early build 77A or 772ER doesn't have much resale value as an aircraft. However, it still shares a lot of parts with 77W's, which are still a popular frame. If the parts value exceeds the value as a frame, the decision is easy.

Owned frames are a bit different. If demand slumps, it costs a lot less to park an older, paid off frame than to park a nice shiny new leased aircraft. Or, you may realize that you have surplus aircraft for the planned schedule, so you can park some of the fleet and save cycles on some aircraft, while running other aircraft out of cycles.

You may also have a situation where you're retiring a type, but still flying them. So some frames retired may go sit in the desert and live on as parts donors.

Note, you shouldn't generalize the US carriers vs other carriers. While it was well known that DL had L-1011's parked for years after retiring the type, when they retired the DC-9's they were cut up within months.

If you look at photos from VCV or other well known scrapping locations, you'll see aircraft from operators all over the world.

Anyways, to sum it all up....it all comes down to dollars and cents and supply and demand. If there's more money to be made scrapping a plane then it'll be scrapped. Look at the 767 used market. A few years ago it seemed the majority of frames in the 20 year age range were getting cut up. Now, due in part to the Amazon demand, you're seeing some pretty aged 767's finding homes in the cargo market, which would more than likely been scrapped otherwise.
 
MBSDALHOU
Topic Author
Posts: 57
Joined: Fri Mar 04, 2016 6:05 am

Re: Aircraft scrapping question.....

Tue Feb 14, 2017 6:29 pm

Thanks for your reply! i appreciate the explanation and it makes more sense now.
 
VSMUT
Posts: 3457
Joined: Mon Aug 08, 2016 11:40 am

Re: Aircraft scrapping question.....

Tue Feb 14, 2017 6:51 pm

MBSDALHOU wrote:
Then we have the US operators who still have numerous aircraft just sitting in the dessert. My question is why do the US airlines have their planes just sitting there vrs the forgein operators have theirs scrapped?


The US planes may not be there for scrapping. It is pretty common for airlines to park a number of aircraft during periods of downtime, or during recessions. That probably explains much of it. US airlines naturally use facilities already in the US, while a company like Ryanair or Lufthansa may use local facilities in Europe for the same, hence why you don't see them storing/mothballing aircraft at the famous facilities in the US desert.

Another reason (at least historically) has been the fact that US airlines had a tendency to operate antiquated planes for longer than most other airlines in the world. Think 757, DC-9s, MD-80s and Tristars. One important reason why aircraft are scrapped "in a hurry" is because there is a demand for spare parts. If those planes belong to one of the last customers, then there simply won't be a market for spare parts. I mean, who on earth would want to buy DC-9, CRJ-200 or 757 spares nowadays? Those types are all leaving service within a few years, if they haven't already. By comparison, new 777s are still being delivered today, hence why 777 spares are highly valuable.

:smile:
 
Kiwinlondon
Posts: 87
Joined: Sun Dec 11, 2011 6:24 pm

Re: Aircraft scrapping question.....

Tue Feb 14, 2017 7:58 pm

With the new generation of aircraft ie A350 and B787 being virtually 100% composite material does anyone know how these aircraft will be scrapped or recycled in the future. Obviously given Aluminium aircraft can be turned into Coke cans what will happen to composites?

Kiwinlondon
 
Slcpilot
Posts: 614
Joined: Thu Aug 07, 2003 3:32 am

Re: Aircraft scrapping question.....

Tue Feb 14, 2017 8:22 pm

This is PURE speculation on my part, but I think the cost of aircraft disposal in the future may exceed the cost of building them!

As crazy as that might seem, imagine the cost of removing the Sears tower or some other large structure built 40 or so years ago.

I believe the cost of complying with environmental regulations will make cutting up composite structures a non-trivial endeavor. We will see, we're still years away from stacks of 787s and A350s clogging VCV.

SLCPilot
I don't like to be fueled by anger, I don't like to be fooled by lust...
 
Chemist
Posts: 666
Joined: Tue Oct 20, 2015 4:46 am

Re: Aircraft scrapping question.....

Tue Feb 14, 2017 8:49 pm

Slcpilot wrote:
This is PURE speculation on my part, but I think the cost of aircraft disposal in the future may exceed the cost of building them!

As crazy as that might seem, imagine the cost of removing the Sears tower or some other large structure built 40 or so years ago.

I believe the cost of complying with environmental regulations will make cutting up composite structures a non-trivial endeavor. We will see, we're still years away from stacks of 787s and A350s clogging VCV.

SLCPilot


Sort of like nuclear energy, which in the 1960's was going to be "too cheap to meter" for electricity. We all know how that went.
 
B757Forever
Posts: 830
Joined: Tue May 04, 2010 3:23 am

Re: Aircraft scrapping question.....

Tue Feb 14, 2017 8:59 pm

VSMUT wrote:
MBSDALHOU wrote:
Then we have the US operators who still have numerous aircraft just sitting in the dessert. My question is why do the US airlines have their planes just sitting there vrs the forgein operators have theirs scrapped?


The US planes may not be there for scrapping. It is pretty common for airlines to park a number of aircraft during periods of downtime, or during recessions. That probably explains much of it. US airlines naturally use facilities already in the US, while a company like Ryanair or Lufthansa may use local facilities in Europe for the same, hence why you don't see them storing/mothballing aircraft at the famous facilities in the US desert.

Another reason (at least historically) has been the fact that US airlines had a tendency to operate antiquated planes for longer than most other airlines in the world. Think 757, DC-9s, MD-80s and Tristars. One important reason why aircraft are scrapped "in a hurry" is because there is a demand for spare parts. If those planes belong to one of the last customers, then there simply won't be a market for spare parts. I mean, who on earth would want to buy DC-9, CRJ-200 or 757 spares nowadays? Those types are all leaving service within a few years, if they haven't already. By comparison, new 777s are still being delivered today, hence why 777 spares are highly valuable.

:smile:


The 757 parts market is quite active. Both UPS and FedEx have large fleets that are not retiring anytime soon. DL will be operating a sizable fleet for the next 10-15 years. Certain parts will continue to be in demand as long as this fleet is flying, particularly pieces most prone to ground damage, bird strike or tire failure. Understand, radomes, ailerons, flaps, elevators, rudders, engine cowls, thrust reversers, fairings etc are no longer being produced by the manufacturer, often the only option is a harvested part.
The Rolls Royce Dart. Noise = Shaft Horsepower.
 
User avatar
litz
Posts: 2350
Joined: Wed Dec 24, 2003 6:01 am

Re: Aircraft scrapping question.....

Tue Feb 14, 2017 9:01 pm

We actually have a real-world example of the cost of cleanup for a major skyscraper tower ... due to 9/11, and the type of progressive collapse of the Twin Towers (plus WTC 7), what was left behind was, effectively, almost identical to what a controlled implosion would have caused in a standard demolition.

The exception, of course, being the massive loss of life, and the fact that the innards of the buildings were not removed prior to collapse, resulting in a debris pile that was contaminated. This, of course, increased the cleanup cost, due to the needs of rescue, hazmat, etc.

Setting that aside, the WTC cleanup costs ran about $3b to $4.5b, offset against a valuation of around 10b to 13b.

Either way, the cleanup cost was far exceeded by the valuation of the property itself.

What we don't know here is what the actual cost of demolition would have been (in addition to the cleanup), since the collapses were caused by a terrorist attack, and not a controlled implosion by a demolition contractor.

In another real-world example, we have the Costa Concordia cruise ship. In that case, the cost of salvage, removal, and demolition almost doubled the construction cost of the ship ($1.4b vs $700m), and when taking in devaluation due to age, probably tripled or quadrupled the actual value at the time of its demise.

The latter example is probably a more realistic comparison for an airliner, as it shows proper depreciation over time.

Simply put, machines and vehicles lose value, real-estate generally doesn't.
 
69bug
Posts: 138
Joined: Tue Mar 11, 2014 12:28 pm

Re: Aircraft scrapping question.....

Wed Feb 15, 2017 1:14 am

One reason to keep the aircraft in storage may be to maintain a nominal 'book' value which would be lost if the aircraft were scrapped / sold.

Airlines are very creative when it counts to managing the value of their assets.

Anil
 
benjjk
Posts: 370
Joined: Fri Aug 08, 2014 4:29 am

Re: Aircraft scrapping question.....

Wed Feb 15, 2017 4:54 am

There are plenty of 'foreign' aircraft sitting in deserts, and there are plenty of US aircraft that get scrapped.

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