THE ECONOMICS OF AIRPLANE RECYCLING
Boeing’s initial interest in airplane recycling began in the desert, where retired airplanes are typically parked. Boeing wanted to find out what happened to airplanes that had left revenue service and why operators often left the airplanes untouched.
The findings showed that most airplanes were parked for a variety of economic reasons. Without an effective airplane recycling program, operators were unaware of the value of recovered materials. In fact, they had a financial incentive to park airplanes when it became obvious they would never reenter revenue service.
For example, a twin-aisle transport that an airline grounds temporarily for economic reasons may have a book value of US$25 million. The owner looks for a buyer who could use the airplane for cargo. As time goes on and the airplane’s appeal in the used airplane market decreases, the owner starts cutting back on costs, such as maintenance.
Eventually, the airplane deteriorates into a condition that makes it impractical to be returned to airworthiness. Yet the owner still has it valued at US$25 million for accounting purposes, and as soon as it is designated for scrap, it will immediately lose as much as 75 percent of its value. Although the airline may be able to recover US$5 million to US$7 million for the engines, rotable parts, and scrap metal, the remaining value must be written off. In essence, it is cheaper on an accounting basis to leave the airplane in the desert than it is to scrap and recycle it.
However, once an airplane is designated for scrapping, airlines have tended to choose the least expensive solution. To meet that demand, a business segment developed that focused on scrapping airplanes at a low cost with little or no consideration of recycling.
However, Boeing believed that airplanes could be recycled in a way that offered both economic advantages to operators and environmental benefits. Boeing’s research showed that the most effective way to maximize airplane recycling would be to develop solutions in a collaborative fashion with companies that are already effectively engaged in that activity. By integrating and growing industry expertise and by advancing and accelerating promising new technologies, Boeing’s goal is to achieve 90 to 95 percent recyclability of the world’s fleet by 2012 with the materials recovered in these recycled airplanes directed toward high-value commercial manufacturing applications.