While airlines wait on new jets, old planes get stripped for parts

According to recent reports, airlines are searching for parts as they prepare for a summer of high demand, with new planes from Boeing and Airbus still in short supply.

Some aircraft owners are searching for parts from older planes that have been retired, which are stripped of their parts to be used on other planes or repurposed entirely. Before the pandemic, the used-parts business was worth about $3 billion to $5 billion. Now, it’s riding a boom in global aircraft maintenance, repair, and overhaul, an industry that is set to expand 22% this year to $94 billion.

The demand for aircraft parts is due to the industry’s deep demand swings caused by the Covid pandemic. In an effort to cut costs when demand collapsed amid travel restrictions, airlines raced to retire planes, only to need aircraft later when demand returned. Carriers also deferred maintenance and prioritized using engines with more time left on them.

With deliveries of new jets behind schedule, airlines are holding onto planes longer, repairing or overhauling them, adding to demand for parts and labor. Meanwhile, Boeing and Airbus are still trying to stabilize their supply chains and train workers after thousands left the industry during the pandemic’s slump.

“There are supply chain issues across the aviation industry at the moment where these highly valuable parts made out of often-rare and precious materials can’t be produced quick enough,” said Lee McConnellogue, chief executive of ecube. “So airlines and maintenance companies alike have to find an alternate source other than brand new.” told CNBC.com.

The demand for parts is driving up prices to rent engines as well, with a CFM56 engine renting for $65,000 a month, up from $55,000 a month last year.

Boeing and Airbus executives plan to increase production and aircraft deliveries this year, which could boost plane retirements and add to supplies of used parts and drive down the price.