RECYCLE, RECYCLE, RECYCLE

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By TESTCustomwebLP TESTCustomwebLP May 16, 2011 08:50

RECYCLE, RECYCLE, RECYCLE

As the parts market is flooded and aircraft rot in the desert (very slowly) we have to remind ourselves of what is on the horizon.

The tax benefits for a company involved in recycling is going to be huge in the long term. We are also in a world where metal prices are at their peek. So why is it that many more companies with a footprint in the aviation sector do not invest in breaking-up and melting down old aircraft? By recycling the metals the airlines, as an example, could use the same to offset carbon emissions and make a stake of cash all at once.

With aircraft fleets becoming younger and the age of retirement of aircraft also getting younger as airline seek to update their fleets with more fuel efficient equipment, the question of what to do with older, unwanted aircraft is becoming more pressing. Secondary markets are shrinking as more and more jurisdictions bring in legislation governing the age of imported aircraft, and with the conversion to freighter market resulting in lower yields, often it is more profitable to part aircraft out. However the glut of aircraft that will be retired soon means the parts market will soon be flooded for certain types of aircraft – getting into the recycling business now could make sound commercial sense.

Look out for the next issue of Airline Economics which feature an article discussing the state of the secondary aircraft market.

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By TESTCustomwebLP TESTCustomwebLP May 16, 2011 08:50
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