IBA: new-aircraft issues will delay the scrapping of older jets

Poor reliability of new-technology aircraft, especially engines, is holding back the scrapping of older-generation airliners. While the number of aircraft to be scrapped post-Covid is expected to pick up some two years from now, the durability and supply chain issues with new aircraft and engines are delaying this trend, IBA Group consultancy said on September 20 during a market update webinar. IBA: new-aircraft issues will delay the scrapping of older jets.

During the Covid crisis, many aircraft were stored to wait for better times or phased out immediately. As IBA Chief Economist Stuart Hatcher noted, thanks to high demand, narrowbody capacity as in available seat kilometers (ASK) has outpaced 2019 levels at some 470 billion kilometers this year to date. Widebodies, regional jets, and turboprops are still operating below pre-pandemic levels.

While the number of narrowbodies stored for scrap peaked at 0.6 percent of the active fleet in Q1 2020, this has come down to virtually nothing by the end of 2022 and continues to be low. At the same time, the gap between entering storage for scrap and the actual scrapping or lead time has gone up. This was also observed after 9/11 and the financial crisis in 2008, when scrapping often started four or five years later.