Why Airplanes Are Still Worth Millions After They Stop Flying

When airplanes are retired, many of them end up stripped for parts that are worth millions of dollars. Almost every component from engines to landing gear. Those parts are in high demand — Boeing and Airbus are behind on deliveries of new aircraft and sold out of planes through the latter part of the decade, just as airlines are trying to capitalize on a resurgence in bookings. What's left over often ends up crushed for scrap metal but parts of the planes are sometimes turned into high-end furniture or even keychains.

The used-aircraft parts trade is a small but important part of global spending on airplane maintenance, repair and overhaul, which Oliver Wyman expects to reach $94 billion this year.

CNBC visited Ascent Aviation Services and Ecubed in the Arizona desert to see what happens to airplanes when they land for the last time.

Chapters:
00:00 — Introduction
01:34 — Airplane Retirement
03:07 — How It Works
06:25 — Business Case
08:00 — What's Ahead

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Why Airplanes Are Still Worth Millions After They Stop Flying

[ckm-mkc]

I did an acquisition analysis of one of these aircraft parts businesses years ago, they are incredibly profitable and somewhat of opaque in their operations. Their inventory value is often in the billions of dollars. The biggest thing is the cost of holding, refurbishing & tracking parts, with length storage time driving underlying profitability.

[angelbulldog]

One of my brothers, USAF Ret., worked at the Boneyard for several years before he died. He didn't talk about it much, so thank you for this video.

[thunderbm]

Isnt this a good thing? Instead of making new stuff and just melting down old stuff, we are reusing perfectly usable stuff.
Also, recycling is the worst case. The first two Rs and reduce and reuse for a reason.

[spaceace]

I visited the Air Museum in Pima AZ back in 2000! It's close to the Boneyard!

[danicalifornia]

Would you do an episode on the seized cars, planes, and other large scale equipment that is sold at auction by both banks and governments?

[rrvqxkb]

Airplanes are generally amazing machines, so this is sad to see. I love aeroplanes! Great video.

[doctrnic]

Unbelievable how much use those planes have gotten

[Aeronaut]

6:03 *TRANSLATION: "Whereas metallic airframes can be melted down and re-used, composites components can't, meaning that almost all of the airframe of modern jets ends up in landfill".

[blakem]

Old planes would make a really cool Airbnb.

[blinkbfsftw]

96% of the plane being recycled is cool

[zapfanzapfan]

An engine cowling can become an awesome Jacuzzi.

[lukethompson]

Those Virgin America A319’s being scrapped were built 2006-2008. GECAS must be talking a huge loss by scrapping them at a young age when they straight line depreciate their planes over 25 years. I really hope these leasing companies are taking the proper write-downs in a timely fashion, because looking at their financials, it really doesn’t seem like they are

[ironclay]

*Comment Number 3* Question: "Out of the 10 ideas I came up with on short notice, Which Idea did you Love the Most . . . and I'm Biased as hell so please don't pick Narco-Subs out of 747's ... OK you can't get better money for an old aircraft but I want you to make your own mind up ... Out of the 10 ideas I came up with on short notice, Which Idea did you Love the Most - and can you tell me why you went for Narco-Subs?

[BaronVonQuiply]

I'd heard elsewhere that used plane parts are considered a high liability, however that may have been referring to private planes and the airlines certainly have the resources to validate parts. The will the to spend the cash to do so... eh... not so much. If a plane crash costs a dollar less than proper upkeep, we're holding funerals.

[MH-pzwf]

They don't use to care and just let the retired planes rot out there. Because of inflation and scarcity and cost concern, now recycle becomes profitable business which is great news for business and earth, too

[frequentlycynical]

A bit more sophisticated than the old Pick Ur Part!

[kristmalacs]

Fascinating..i always wonder about that. Now i have the answer

[revee]

As someone that is 40 years old and has never been on a plane this is all a huge waste of money.

[mrbond]

I thought Mike Ehrmantraut from BB & BCS was head of something for a second there but then they showed David Querio.

[stevenholt]

The scrapped aluminium can be used for beverage cans rather than landfills and aircraft boneyards.

Maybe old aircraft can be made into new aircraft.