Jetrader - Autumn 2015 - 34

fairly new and still a highly desirable aircraft," he said. "But if you can buy the right
aircraft at the right price to dismantle,
there can be substantial rewards."
Other aircraft currently at our facility include A320s and A319s from around
2000-2001, Gregory said. "There are lots
of aircraft available for sale in the market
at present, and we get offered aging or
older aircraft at substantial prices, but
there too many out there to justify the
price," he said. "With widebodies, we see a
lot of 747-400s, and we're seeing an influx
of A340s coming in a lot quicker than they
did in the past five years."
In looking at the part-out aircraft market, Gregory said his company is handling
younger aircraft year on year. "And the
value in the parts from those aircraft
remains substantial at present. We've
been in the business for 18 years and we've
grown steadily," he said.
The number of aircraft retiring is typically less during the summer, Gregory said.
"Summer is when airlines have to fill gaps
to handle peak demand," he said. "Aircraft
for storage and retirement begin arriving
in mid-September and often continue to

arrive until around March of the following
year. They aren't always on the verge of
retirement, but are often approaching a
heavy airframe check and are positioned
with us to give the owners options. It can
often be more lucrative by disassembling
the aircraft and restoring the parts."
All aircraft have a price at which they
will sell, regardless of type, Lee said.
"The demand for new aircraft is strong,
but there's still significant demand for
secondary aircraft for operators who can't
attract funding for new aircraft," he said.
Lee said he's not in the part-out market
all the time. "I try to avoid selling aircraft
on part-out, instead focusing on selling
to flyers," he said. "With the availability of manufacturing financing and the
appetite for the market to finance new
aircraft, it forces older models out of the
market sooner."

Markets Across the Globe
Lee feels that Asia is the top market
for taking on used aircraft. "There's huge
growth potential there," he said. "China has
been building the equivalent of a London
Heathrow once a month for the past four

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The official publication
of the International Society of Transport Aircraft Trading
1

years. The vast geography of China and,
more generally, Asia means that air travel
will be a natural component of economic
growth in the region. In places like the
archipelago of Indonesia, flying is the most
obvious way to get around."
South America and Africa have been
challenging regions because they can be
so volatile, Lee said. "There has been significant growth in South America, but in
Africa, it will depend on the longer-term
political stability."
Because the aircraft market is cyclical,
it is inevitable that the pendulum will
swing, which will bring the focus back on
the used market. Yu feels that given that
oil prices are expected to remain low, it
will be at least five years before the swing
happens. "Since we've been in this cycle
since 2009, it seems to be a super cycle,"
he said. "But there is a caveat. If there's
an exogenous shock like SARS or an H1N1
outbreak, and it gets overblown, it could
affect the fleet in the region."
Benét J. Wilson is a freelance aviation/
travel journalist and blogger based in
Baltimore, Maryland.

08/07/15 3:52 AM
Jetrader - Autumn 2015

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