Tuesday, 5 June 2018

Former Singapore Airlines Airbus A380's to be stripped and broken up for parts.

The German-based Dr Peters Group have decided to effectively scrap the two Airbus A380's it received back from Singapore Airlines at the end of the 10-year lease the airline took the superjumbos on.

Singapore Airlines decided not to extend the leasing contracts on the A380's after the basic term of ten years, pas partly due to the high leasing costs as well as getting cheaper and more fuel-efficient newer models from the manufacturer, Airbus.

Following that decision, the Dusseldorf based Dr Peters looked for alternative options and had been in negotiations with a number of airlines who might have wanted to lease the first generation A380's including British Airways, Hi-Fly and Iran Air. However, as of yet, it had failed to find any interest, especially at the base lease prices they offered. Therefore, Dr Peters Group has decided to sell the aircraft components.

Dr Peters Group said it will be working with VAS Aero Services on the sale of the component parts, which it expects to make $45 million from as many other carriers operating the A380-800 will have a high demand for individual replacement components due to upcoming maintenance intervals.

They will also extend a leasing agreement they have with engine maker Rolls Royce, to lease out the engines while others are being overhauled or maintained. Apparently, the company estimates it could make as much as $480,000 a month from the engines for the next two years.

Anselm Gehling, CEO of Dr Peters Group said, "The market for the A380-800 aircraft type has not developed positively in recent years. Some airlines have cancelled orders from Airbus, while others have opted for smaller long-haul jets. Finally, the ongoing negative discussion about the A380-800 has not led airlines to increasingly rely on this type of aircraft. In light of this development, the concept that has now been finalised is an excellent achievement with a total revenue forecast of around 80 million USD per aircraft".The company have said it will have a 145 - 150% return on its investment on the aircraft.

An Airbus spokesperson said “We can’t comment on the decision by Dr Peters, which is the owner of the aircraft.  We remain confident in the secondary market for the A380 and the potential to extend the operator base.”