The past financial crisis in 2008 led to an aftermath with airlines retiring hundreds of aircraft per year, and with it the availability of used serviceable material (USM) exploding. This offered airlines cheap alternatives to expensive purchases of new parts or repairs.
In the years since, aviation has experienced such strong growth that mature aircraft have remained in service longer than predicted, resulting in a significant reduction in retirements, part-outs and, ultimately, short supply of used parts. Air traffic demand outpaced supply.
However, it has long been predicted that the roughly 2,000 aircraft delivered during the production peak in the late 1990s (now 20-24 years old) would ultimately reach the state of retirement.
COVID-19 has now accentuated this retirements wave by bringing air travel to nearly a halt with a recovery expected to be years from now. Of the 16,000 aircraft that are currently parked, far from all will return to service. The resulting retirements wave will be larger than what was projected only a few months ago.
How will this impact the timing and availability of USM and what will the impact be on the MRO market?