Planes on Pause: COVID forces aircraft into storage

[caption id="attachment_414243" align="alignright" width="460"] American Airlines sent many of its jets to be parked in Tulsa, where its maintenance base is located. (Photo: American Airlines)[/caption] On July 8, a 767-300ER (25583) previously operated by Air Canada Rouge and parked at Kansas City (MCI) touched down at Pinal Airpark (MZJ), followed by two more Air Canada 767-300s in the next two days. All three planes, considered suitable conversion feedstock, have been inducted into storage programs at Ascent Aviations Services, located at MZJ. Seven months ago, the aircraft operated on well-worn routes, along with thousands of passenger aircraft. Today, those same routes are quiet in the wake of the COVID-19 crisis. According to the International Air Transport Association (IATA), worldwide passenger demand in May 2020 dropped by 91.3% year on year, just a slight improvement over the 94% decline in April. In the U.S., domestic air travel in early July was down by around 71% compared to a year ago, and international air travel was down 90%, according to Airlines for America. Meanwhile, at airports and maintenance, repair and operations providers (MROs) across the world, especially those located in hot, dry locations like the Arizona desert, planes are grounded. And with so many aircraft grounded, decisions about where and how they are stored in the coming months will determine whether planes re-enter passenger fleets or become repurposed for cargo. But stakeholders don’t have unlimited time to make their decisions: If aircraft aren’t stored strategically, they could end up in the scrapyard. Investing in storage According to Brian McCarthy, vice president of marketing and sales of Precision Aircraft Solutions, which often converts previously stored aircraft into freighters, the coronavirus pushed many plane owners to put their planes into either short- or long-term storage programs, which both have pros and cons. While putting a plane into long-term storage might be expensive and time-consuming up front, short-term storage typically ends up being more costly due to the constant maintenance required. “The difference in cost [between short-and long-term storage] is really in the frequency of running engines and moving the aircraft and everything else,” said Dave Querio, president of Ascent Aviation Services at MZJ, where many of Air Canada’s 767s are currently stored. “ From a standpoint of financial and manpower, it is a significant investment to put the aircraft into storage,” Querio said. “Each aircraft requires somewhere near 500 man hours to fully induct it into heavy storage.” According to McCarthy, the programs aren’t cheap and “operate on a twenty-eight-day cycle,” with planes requiring attention every seven days. “You’re running engines. [You’re] doing various tasks that really cover up their plane and minimize moisture inside,” he added. Storage concerns Some airlines have adopted a hybrid short-term storage program to save costs, McCarthy said. Aircraft are flown just once every two weeks, with very few storage measures taken during the intervening time. So, planes are effectively being in short-term storage without heavy financial costs. However, such conditions aren’t ideal for planes, according to Scott Butler, chief compliance officer at Ascent Aviation Services. Butler described the ideal conditions of airplane storage as warm, with low humidity and low salt. “For aircraft, the opposite of those will cause corrosion and cause a lot of issues come their return to service,” which is why planes are often stored in desert environments. While there is a limit to safe storage time at any location, it’s fairly generous, according to McCarthy. “We’ve converted and dealt with many airplanes that have been parked for four or five, six months in a humid area,” he said. “And we have not really ever seen any issues related to that.” Concern begins to creep in at the one-year mark. “If an airplane sits for a year, we start to get nervous and worried,” McCarthy said. [caption id="attachment_414244" align="alignleft" width="460"] Qantas and affiliate Jetstar parked many of their aircraft in Avalon. (Photo: Qantas)[/caption] But as the pandemic drags into its seventh month, some airlines are already showing signs of unease. According to a Reuters report, Cathay Pacific announced it may move fifty of its 236 widebody planes from humid Hong Kong to a drier locale like Alice Springs (ASP) or Dubai (DWC). Cathay competitor Singapore Airlines has already relocated some of its aircraft to the Asia Pacific Aircraft Storage facility at ASP, including several A380s that began arriving late-April, according to a video posted by the airport. Australian carrier Qantas said in late May that the carrier and affiliate Jetstar had parked 220 aircraft at various airports around the country. Recycling and conversion According to McCarthy, airlines may be using this mass grounding as an excuse to part with planes that are near the end of their life cycles. “I imagine that they’re only protecting the airplanes they care the most about,” he said. Planes that airlines have no intention of flying post-pandemic are being put into low-cost desert storage programs, said McCarthy. The North American Aerospace Industries Corporation (NAAI) is working to make recycling a more attractive option by recycling more of the plane and increasing the value of part-outs. According to the company, most recycling facilities are capable of recycling 85% of an airplane at maximum efficiency, although in practice the percentage is closer to 60%. Meanwhile, NAAI is in the process of building a new recycling location in Kingman, N.C., that aims to be equipped to recycle 100% of an airplane, according to NAAI President Sven Daniel Koechler. This could offer an alternative for craft that would otherwise end up in storage indefinitely. When the Kingman recycling center opens in the fourth quarter of 2021, the facility could reduce reliance on airplane graveyards. In the meantime, Air Canada’s 767s, which are just over twenty-seven years old, are prime candidates for conversion, scrap or recycling. And in the U.S. alone, they’re joined by dozens or even hundreds of A321s, 737-800s, 757-200s and 767-300s in locations like VCV, Roswell (ROW), Tulsa (TUL), MCI and Birmingham (BHM). According to Airlines for America, as of the end of June, around 2,400 of U.S. airlines’ aircraft remained idled, including 86% of 767s, 73% of A330s, 72% of 757s, and 31% of 737s. How many of these aircraft will return to service as passenger planes, be parted out for scrap, or live second lives as freighters? The answer may depend on how long the pandemic drags on, and how well the planes have been preserved during the intervening time.

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E-tailers shop for airfreight as their share of retail rises

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CARGO FACTS CONSULTING

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