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Exclusive interview: “Value propositions create opportunities for part outs” [MRO Editorial] Open the MRO Magazine - April 2023 Edition

Lee Carey, Vice President, Asset Management at EirTrade Aviation
Lee Carey, Vice President, Asset Management at EirTrade Aviation

AviTrader´s Keith Mwanalushi speaks to Lee Carey, Vice President, Asset Management at EirTrade Aviation about the first disassembly of the Boeing 787 and the market trends for used serviceable materials for newer aircraft.

In February, Dublin-based EirTrade Aviation unveiled the first known disassembly of the Boeing 787 – two 10-year-old aircraft have been disassembled simultaneously off-site, with parts expected to be available by the time of this publication.

Online sources have suggested the B787s were previously in storage and operated by Norwegian.

The first two 787-8s to be retired marked a milestone for the industry but are not entirely surprising considering the market shocks that have hit the aviation industry in the last few years. For the B787, Lee Carey Vice President, Asset Management at EirTrade says the value proposition and supplying the market with more options for used serviceable materials (USM) were the key factors in deciding to pursue the project.

“The driver of those aircraft going into teardown was very much to do with the value proposition in terms of part out, and the value of those aircraft as a teardown versus other alternatives like putting the aircraft back into service,” he tells AviTrader MRO.  

Carey believes some of the reasons the value proposition is so strong is the timing relating to the first deliveries of the B787-8 aircraft which are expected to go in for the first 12-year heavy checks this year, same as the overhaul interval on the landing gear which is also at 12 years and lined up with the heavy maintenance checks. These factors will likely create significant opportunities for material consumption for the market.

Obviously, the B787s are still new aircraft, so there is very little used serviceable material on the market and EirTrade project a significant amount of demand for material coming down the pipeline because of the lack of material and supply chain issues. “Many operators don’t have much option over the supply of new material now, there is perhaps some serviceable material that is being supplied by the OEMs currently through exchange programmes. So, this is the first large source of independent material for the 787s that is available and will hopefully contribute towards reducing maintenance events somewhat for those aircraft owners,” he anticipates.

Carey is mindful that the disassembly of just two aircraft will not make a huge overall impact in terms of supporting the demand for B787 material, but it’s certainly a start. He says issues around the supply chain with new material will only increase the demand for the USM coming off these aircraft.

Aircraft OEMs will tend to keep a strong grip on spares and pricing especially where there is limited supply so EirTrade will be studying this closely. “Currently we are just entering the market and our strategy is to discount what is currently available for operators to give a more economical solution for their maintenance events.”

Carey adds that the company is keen to establish itself as the leader in terms of serviceable material for the B787. 

Back in February 2020 EirTrade took delivery of an A380 aircraft for part out following the Covid crisis that saw them enter early retirement. Several operators have now returned their A380s back to service. “We disassembled the Ex. Air France A380 aircraft but I think that aircraft is a very different product and the B787 will have a very different lifecycle.”.

While a lot of operators have brought the A380 back, many in the industry question how long they will continue operating them and besides the big flag carriers in the Middle East, it’s hard to see those flying for a long period of time.

Carey comments: “But with those aircraft going back into service, we have seen an uptick in demand for that material, however they are two very different products and we see them entering a tear down process for very different reasons.”

In terms of feedstock supply for future B787 disassembles Carey indicates that EirTrade will continue to examine  future opportunities to acquire more B787 aircraft. “I think it’s a case of having to identify a unique scenario where the value proposition makes sense and certainly it’s something we are looking at because we want to cement ourselves as the USM market leader on the Boeing 787.” Despite the demand, Carey acknowledges that future acquisitions may not be easy to come by.

Over the last several months EirTrade have worked on building relationships with shops that might have repair capability on this aircraft and Carey reports that things are looking positive. “We are very excited to be the first to market with the B787 following our involvement with the first A380s to go to tear down and we were one of the first companies to disassemble the CFM56-7BE so we are no strangers to being the first to market on a product.”

EirTrade has been ramping up its aircraft disassembly activities at its facility in Knock, Ireland West, focusing on Airbus and Boeing aircraft. Carey, believes that the company’s proven track record and global network were pivotal in securing the B787 deal and says the targeted relationships with airlines, MROs and OEMs on the B787 platform were crucial to securing this project and maximising the value of the two aircraft.

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