Airplane Scrap Could Hit Market

The slump in air travel since the September 11 attacks might multiply the amount of scrapped airplanes hitting the metals market.

News reports out of the United Kingdom are claiming that as many as 1,300 commercial jetliners may be scrapped by airline companies this year—far greater than the annual average of 250 planes that are scrapped each year.

Since the cutback in flights that has occurred in the wake of the terrorist attacks, commercial airlines have taken some 2,000 planes out of circulation. Many of these jetliners are parked at a storage, repair and staging area in Arizona.

The news reports in three different British newspapers—the Sunday Times, Observer and Mail—cite a vice president at Boeing, Chicago, as claiming that more than half of these planes could be scrapped if airlines stick to their lighter flight schedules.

The Boeing executive is quoted as saying that the planes are likely to be stripped of useful parts before being sold for scrap, perhaps fetching a combined $1 million in scrap value.

But the scrap income will not come close to equaling the loss in value the airlines will suffer by losing the inventory value of the aircraft.

If the mass airplane scrapping takes place, the high-temp alloys and titanium markets will likely be the hardest hit. One scrap trader notes that muted aircraft orders have already kept demand low, with many specialty alloy mills running at 70 percent of capacity.

Should airlines begin to inventory engine parts from dismantled and scrapped aircraft, that will only further reduce demand for parts made from titanium, nickel-cobalt alloys and other specialty metals.