International

With airline fleets grounded, plane recyclers bet on parts boom

Published

4 years ago

September 14, 2020

MONTREAL (Reuters) – As COVID-19 grounds swaths of airline fleets, companies that profit off the dismantling and trade of aircraft parts are seeing early signs of an expected rebound in activity as carriers accelerate plane retirements.

While companies that store, dismantle, and buy and sell used aircraft parts see opportunity in parked planes, a sudden increase in the supply of used parts risks depressing prices in the estimated $3 billion a year industry, despite demand from airlines seeking to lower maintenance costs, executives and analysts say.

Even as aviation remains in a slump because of the pandemic, the head of U.S. commercial aerospace company GA Telesis was made aware of five airlines calling for offers to dismantle planes.

Across the border, Canada’s Aerocycle is bidding to buy grounded planes for the first time to dismantle and resell for parts, instead of just recycling aircraft on consignment from carriers, its CEO said.

The fate of the world’s pool of grounded planes is being closely watched by players in the market for used-serviceable material, with one report from consultants Oliver Wyman forecasting “a tsunami of demand” for such parts, as airlines seek to lower costs.

Used materials could compete with new parts and defer immediate airline demand for “aftermarket” spend, referring to the maintenance, repair and overhaul sector, now estimated by Naveo Consultancy at $50 billion.

As a result, one industry executive said he has avoided buying parts, fearing a slump if too many planes are dismantled.

“I think we’re going to see a rapid decrease in pricing,” said the executive, speaking on condition of anonymity.

The number of planes dismantled for parts or scrap could double to 1,000 annually through 2023, up from roughly 400 to 500 planes a year since 2016, according to data firm Cirium.

Naveo estimates 60% of global passenger and cargo fleets are currently flying.

In 2020, Naveo expects 2,000 aircraft will be retired, or parked and not returned to service, up from 680 in 2019. But those planes would not all be immediately dismantled, as some carriers wait in case market conditions improve, Managing Director Richard Brown says.

Indeed, UK-based Air Salvage International, which normally dismantles between 40 and 50 aircraft a year, has parked more planes without a buyer for their parts since the COVID-19 outbreak. Founder Mark Gregory expects most will eventually be dismantled.

Before the pandemic, planes arrived at Air Salvage with a buyer, reflecting healthy demand for coveted parts like engines.

Airlines seek viable used parts from retired aircraft for their younger planes that are due for heavy maintenance. That allowed airlines to avoid costly repairs and keep their aircraft flying.

GA Telesis, which counts Tokyo Century Corp 8439.T as its largest shareholder, has seen airlines use spare parts from their grounded aircraft to put off maintenance at the company’s repair business, chief executive Abdol Moabery said.

Early retirements

The pandemic, which is expected result in a 55% drop in 2020 passenger numbers, has prompted early retirements of older planes, including the grounding of B747 jets by British Airways, some of which are headed to Air Salvage.

Fewer twin-aisle planes flying internationally means less demand for their parts, with the exception of certain aircraft used to transport cargo.

Gregory said Air Salvage was approached by an aircraft leasing company about dismantling several A380s, but with only about 5% of the jumbo jets still active according to Naveo, demand is slim for their parts.

Airlines are looking for narrowbody parts, since around 64% of that single-aisle aircraft type are active, flying domestic routes.

James Benfield, a UK partner with Baird Capital, expects increased demand for disassembly services for single-aisle B737 and A320 aircraft, after the private equity company acquired a disassembler in August.

While maintenance companies and new engine producers also deal in used materials, a parts surplus could weigh on their sales.

General Electric Co’s GE.N CEO said during a July earnings call that the company is “well positioned to participate” in the industry trend for used serviceable material.

GE Aviation makes engines, but also uses second-hand parts.

Bargain hunters

Aerocycle sees opportunity in plane retirements. The small aircraft recycler has hired a new business development executive to drive demand, as it looks to buy planes, CEO Ron Haber said.

“It’s a calculated risk,” Haber said. “We know what type of aircraft are going to be flying and still in high demand.”

Airlines have avoided selling aircraft at losses, despite pressure from certain bargain-hunters.

“There’s a lot of low-balling going on,” Moabery said. “But those offers aren’t being accepted yet.”

Companies like Florida-based International Aircraft Associates (IAA) are watching in case airlines and lessors cut their losses by year’s end and convert their parked planes for parts.

“If they do that, that’s when people like us want to be ready,” IAA President Mitch Weinberg said.

Reporting and photo: Reuters

International

Nika Zorjan’s ‘V Postelji’ music video showcases timeless beauty of Maldives

Published

4 months ago

July 22, 2024

m@ldives

Released just three weeks ago, Nika Zorjan’s latest music video, ‘V Postelji’ (meaning “In Bed”), has captivated audiences with its stunning cinematography set against the breathtaking backdrop of the Maldives. Directed by videographer Niko Karo, who accompanied Nika to film the video, the project was organised by Moji Maldivi, an agency based in Slovenia dedicated to promoting the Maldives as a premier holiday destination in Balkan region.

The video beautifully captures Nika strolling through serene pathways shaded by iconic coconut palm trees at Villa Park, later walking along the sun-kissed beaches of Villa Nautica, and finally enjoying the golden sunset on a bed at the beach of Furaveri Maldives. Each scene showcases the natural beauty and tranquil ambiance of the Maldives, enhancing the emotional depth and visual splendour of the music video.

Nika Zorjan, renowned as a Slovenian pop star and Eurovision contestant, has also gained fame for her cover songs, including her most popular rendition of Sia’s Cheap Thrills, which has amassed nearly 50 million views on YouTube, with over 60 million total views on the platform. “Shooting a video in the Maldives is heavenly,” she added. Filmed in one of the world’s most captivating tourist destinations, the Maldives serves as more than just a scenic backdrop; it becomes an integral part of the video’s narrative.

V Postelji not only showcases Nika Zorjan’s musical prowess but also pays homage to the Maldives’ timeless allure and cultural richness. The video has resonated deeply with audiences, garnering praise for its artistic vision and the mesmerising beauty of the Maldivian landscape. The lush greenery, crystal-clear waters, and pristine beaches depicted in the video create a sense of paradise that complements the song’s evocative lyrics.

As viewers continue to immerse themselves in the captivating visuals and emotive melodies of V Postelji, it reinforces the Maldives’ reputation as a destination where natural beauty and tranquility converge effortlessly. Nika Zorjan’s collaboration with Niko Karo underscores their shared appreciation for the Maldives’ serene ambiance and its ability to inspire creativity and emotional expression. This partnership, facilitated by Moji Maldivi, highlights the agency’s dedication to showcasing the Maldives as an unparalleled holiday destination to the Balkan market.

Featured

Emirates undertakes largest known fleet retrofit project

Published

2 years ago

August 23, 2022

m@ldives

Emirates has kick-started its plans to upgrade the entire interior cabins of 120 Airbus A380 and Boeing 777 aircraft – two of the largest commercial aircraft types in service today.

This ambitious project, representing a multi-billion dollar investment to ensure Emirates’ customers “fly better” for the coming years, officially commences in November and is managed entirely by Emirates’ Engineering team.

The target is to completely retrofit four Emirates aircraft from start to finish every month, continuously for over 2 years. Once the 67 earmarked A380s are refreshed and back in service, 53 777s will undergo their facelift. This will see nearly 4,000 brand new Premium Economy seats installed, 728 First Class suites refurbished and over 5,000 Business Class seats upgraded to a new style and design when the project is complete in April 2025.

In addition, carpets and stairs will be upgraded, and cabin interior panels refreshed with new tones and design motifs including the iconic ghaf trees which are native to the UAE.

No other airline has handled a retrofit of this magnitude in-house, and there’s no blueprint for such an undertaking. Therefore Emirates Engineering teams have been planning and testing extensively, to establish and streamline processes, and identify and address any possible snags.

Trials began on an A380 in July, where experienced engineers literally took each cabin apart piece-by-piece and logged every step. From removing seats and panelling to bolts and screws, every action was tested, timed and mapped out. Potential impediments to completing the installation of Emirates’ new Premium Economy Class or the retrofit of the remaining three cabins in just 16 days were flagged and documented for expert teams to review and address.

As part of the programme, new purpose-built workshops will be set up at Emirates Engineering to repaint, re-trim and re-upholster Business and Economy Class seats with new covers and cushioning. First Class suites will be carefully disassembled and sent to a specialised company to replace the leather, arm rests and other materials.

From the trials, Engineers discovered several unexpected solutions for instance: that existing food catering trucks could be easily repurposed to move parts destined for refurbishment from the aircraft to the workshop for their refresh, as these vehicles had doors of the right width and offer sufficient space.

Until the retrofit programme starts in earnest in November, a cross-disciplinary team has been assembled to regularly review the planning process, address any issues, and track updates on various aspects of the project such as procurement, staffing, and training.

Emirates’ new Premium Economy cabin class, which offers luxurious seats, more legroom, and a service to rival many airlines’ business offering, is currently available to Emirates customers travelling on popular A380 routes to London, Paris, Sydney. More customers will be able to experience the airline’s new Premium Economy cabins starting from year end, as the retrofit programme picks up momentum.

Featured

Eleanor helps over 30 Maldives hotels elevate guest services

Published

2 years ago

May 27, 2022

Michelle

Eleanor has been named as one of the top 10 concierge software providers globally.

Based on accurate, timely reviews from real users, the HotelTechAwards rank the world’s best hotel software firms and products and it also provides hoteliers direct access to a growing network of hotel technology professionals and decision-makers.

“The guest experience is the cornerstone of our platform. Our unified resort wide solution, Eleanor, has been built for resorts off the back of many years working in the industry and addresses the needs of both Sales and Marketing departments and perhaps just as importantly, the operational requirements of the team on the ground at the property. The days of resorts working with disjointed systems are now behind us,” says Darren Caple, co-founder and CEO.

“We are on a mission to make the guest’s resort experience as easy and as frictionless as possible. Whereas traditional providers in the market have come at this purely from a guest communication perspective, our background in resorts has allowed us to combine this basic requirement with the streamlining of operational processes. The result is truly a resort wide solution that removes the need for countless different systems to be deployed.

Eleanor allows resorts to deliver consistent, superior service levels to guests across all stages of their journey with contactless features helping to alleviate sensitive touch-points in the post pandemic period. More than 30 properties in the Maldives use our Eleanor platform to help butlers and guest services elevate the guest experience. These properties are seeing an increase in incremental revenue by over 30% and operational efficiencies of 600+ man hours per month. We are also beginning to roll out the platform in some Caribbean properties!”

Eleanor is making waves in the hospitality industry by pushing the conventional limits of what a resort guest app can achieve through its unique ability to facilitate direct bookings for services and activities. The traditional ‘request to book’ feature that is common amongst almost all other hotel apps is removed by a power booking and operational platform sitting at the heart of the solution that covers all the resorts’ departments. It’s this module which realises enormous operational benefits and insights for the resort.

“We, at Eleanor, are humbled and honoured that our clients have provided such positive reviews. Feedback from our clients, partners and hoteliers are incredibly valuable for us and we will continue to improve our offering and services”, said Caple.

To celebrate this success, Eleanor is currently offering resorts a free one month trial, together with free setup and training and discounted monthly fees.

Eleanor, founded in 2018 and has its headquarters in the United Kingdom. Created from over 15 years of hands-on expertise, Eleanor allows resorts to deliver consistent, superior service levels to its guests across all stages of their journey with contactless features helping to alleviate sensitive touch-points in the post pandemic period. Eleanor also helps to unlock operational efficiencies and boost incremental revenue and guest loyalty.

Hotel Tech Report’s Best Concierge Software 2022 Runner Up, reviewed as a preferred and reliable hotel software product by the global hotelier community.

For more information, visit www.eleanorapp.com.