Dreamliners, Scrapped. The Commercial Aviation Business is Broken

The airline industry has always been challenging. Very high fixed and variable costs and extreme sensitivity to external events as varied as a conflict between nations and lousy weather conspire to make profitability thin and risks increased. In commercial airplanes, high equipment costs mean that dispatch reliability is critical for profitable operations. Planes don’t make money in the hangar, meaning any disruption to spare parts logistics has serious consequences. Breaking up older airframes for spare parts has a long history.

Still, the combination of global shortages and a recovering airline industry means that some midlife aircraft are worth more as a source of spares than functioning airplanes. Eirtrade has scrapped a pair of barely 10-year-old Boeing 787 Dreamliners in Prestwick, Scotland, to provide replacement parts. Does this make economic sense from a global perspective?

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