Aircraft Storage Forecasts Near-Term Economy

By Elyse Moody

The transitional aircraft storage business is thriving, but Southern California Aviation recognizes that its peak in business portends valleys for industry at large.

John White, vice president of sales and marketing, says he expects most of the 155 or so aircraft parked on the company's concrete lot today to return to service, and he hopes that happens soon.

"When we see a lot of aircraft come in, each aircraft represents job losses, and that is not what we like to see," he says. "It reaches far, far, far into the economy, [deeper] than most people recognize. We're very sensitive to that. We're excited when the planes go back out to work."

White notes that parked aircraft create an economic ripple effect that touches businesses from catering crews to suppliers of steel-toe boots for mechanics. "The airplane is just a part of it," he says. "It is kind of in the middle. Everything gets affected."

He says that SCA's outdoor storage facility at Southern California Logistics Airport in Victorville can accommodate about 250 aircraft, although it could probably lease additional space at the airport if it needs more capacity. Customers often request that engines be removed from stored aircraft and shipped to a main base as spares.

Farther south, in Marana, Ariz., Evergreen Maintenance Center also reports steadily increasing traffic. Marketing Vice President Steve Coffaro says his company has witnessed a 15-25% increase in storage in the past six months, and he anticipates another 15-20% hike in the next four, with aircraft numbers on the lot continuing to grow through the summer as passenger demand shrinks. "I definitely feel that there will be an increase in the domestic sector in the summer time frame," he says.

Beyond domestic narrowbodies, Coffaro notes that Evergreen is taking in more international long-haul aircraft these days. He also is experiencing an increase in younger aircraft that "come in and then go right out." Like White, he emphasizes the importance of the remarketing aspect of the short- and medium-term (90-to-120-day) aircraft storage business, particularly for aircraft 15 years old or younger. Of the almost 200 aircraft under Evergreen's aegis, Coffaro says he expects 50% to be returned to service, either with current or new operators.

While storage facilities are profiting now, an upturn in the economy will not necessarily mean a downturn for aircraft storage providers. The relationship is not inversely proportional. As Coffaro says, Evergreen expects demand for its remarketing services to grow. "With the amount of aircraft being placed in storage today and over the next four to six months, I think there is definitely a possibility that you'll see an increase on the remarketing side," he says. "Obviously the leasing companies and financial institutions would like to see these aircraft working as soon as possible."

And, prepping aircraft for storage is only half the job. For the many aircraft that won't be dismantled--their parts salvaged, sold for scrap or recycled--reactivation means work.

"Watching [economic] factors, the good and the bad, we can pretty much tell when our business is going to be very busy due to receiving aircraft that need a place to wait this out," SCA's White says. "And, when it starts to kick in again, we're going to be very busy putting these aircraft back to work."

When an aircraft arrives at a transitional facility, its fate is in the task cards. Long- and short-term storage providers such as SCA and Evergreen base their maintenance programs on the airline and manufacturer maintenance manual requirements to prep an aircraft for storage per specific task card instructions.

For long-term storage, this entails emptying lavatories and flushing the toilets and water systems, closing the shades, removing coffee pots and batteries, and covering cockpit and cabin windows. Technicians then wash and lube the aircraft, and "pickle" its engines, running preservatives through them before covering them and all the inlets. Typically, the manufacturer paces maintenance activities every seven, 14 and 30 days. Every seven days, covers are checked; every 30 days, tires are rotated.

For flight-ready programs--a 30-day storage period--technicians run the engines and full systems every seven days. "That plane is basically ready to go at a moment's notice," White says. This makes sense in cases where the owner expects an aircraft to be sold or return to service quickly, since it takes seven to 10 days to reactivate an aircraft that has been in long-term storage. However, once the 60-day threshold has been breached, an operator might want to consider a longer-term solution.

To mothball an aircraft for a year, maintain it per OEM/airline requirements and then reactivate it, Coffaro says, it typically costs about $60,000 for widebodies, and about half that for narrowbodies.

In terms of quirks, airline customers do not have many. Some aircraft arrive with the logos painted out, some do not, White said. But, many carriers take advantage of the opportunity to build the spares pool for their in-service fleets. Engines are always one of the primary items that are removed during storage and shipped to a customer's main base, Coffaro notes.

Others opt for engine maintenance during storage time. "Airlines are smart," White says. "They manage [stored] aircraft by the maintenance clock."

This article appeared in the April 20 issue of Aviation Week & Space Technology.

Photo: Evergreen Maintenance Center

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