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Threshold Aviation, a fixed-base operator at Chino Airport, does more than maintain and upgrade private jets – sometimes it dismantles them.
For the past seven years, Threshold has been recycling planes and selling them for parts. That practice that did not become common in the aviation industry until about 25 years ago, according to Pete Nichol, Threshold’s special projects manager and the person in charge of the company’s recycling division.
Finding buyers for affordable airplane parts is never difficult, Nichol said.
“It’s a very strong market, because a lot of airplane owners are tired of paying exorbitant prices for new parts, especially if they know they’re only gong to fly the plane for a few years,” Nichol said. “We’ve done well, and we expect to keep doing well.”
Nichol spoke recently with IE Business Daily about the process of recycling planes, why some planes generate more revenue than others, and why recycling planes is expected to get more popular.
This report has been edited for length and clarity.
Q: How long has Threshold been recycling planes?
Pete Nichol: What we’re doing now we started in 2018. We recycled maybe half a dozen planes before that, starting in 2000, but the program we’re doing now started seven years ago.
Q: How many planes have you recycled since the current program started?
PN: Probably in the low 40’s.
Q: Is the recycling a separate division within Threshold?
PN:: Yes, it’s a subdivision of our maintenance group, and it does its work in the repair station, but it’s not an independent company. It’s part of Threshold.
Q: When do you decide that a plane has to be recycled?
PN: Generally, we don’t. The plane’s owner usually makes that decision. One time we had a plane that was coming up for a 10-year engine overhaul, and the owner had budgeted $10 million for that. But the engine overhaul was going to cost $13 million, so the owner decided to sell the plane for parts.
Q: A lot of the recycling process involves removing hazardous materials, correct?
PN: Yes, but it depends on how you define hazardous material. Batteries can be defined as hazardous material. So are fire extinguishers, and oil and fuel, but we generally run all of the fuel out of the plane when we’re testing it, and the oil is recycled. But you’re right, there’s hazardous material in just about every plane, whether it’s a single-engine or a commercial jetliner.
Q: Is it also true that the number of retired aircraft is expected to grow? One report says that, worldwide, about 44 percent of all planes are scheduled to be retired between now and 2040. That includes 13,000 commercial, military, and private plane. Are those numbers accurate?
PN: Yes, that sounds accurate, and there are a lot of reasons for that. One reason is technology. A lot of engines, when they were made, were at stage one for noise suppression. If you can’t get an engine to stage four, then it can’t be used anymore. Also, there are safety upgrades that you have to deal with on planes. The Federal Aviation Administration puts out a mandate, and if you don’t meet it you can’t fly the plane in the United States.
Q: Can regulations make an upgrade too expensive, so the plane ends up being recycled?
PN: Yes. You can reach a point where you can’t keep the airplane flying because of the regulations. So you recycle it because the parts are too valuable.
Q: Can you talk about taking a plane apart? What kind of work does that require, and how much does it cost?
PN: When we decide to disassemble a plane, we test it for a day or two outside. We run every system on the airplane, and we verify all the components, what works and what doesn’t work. If it works, we can certify it as inspected and tested, and we can sell it the way it is. We can also sell the electronic parts, if they’re still working.
Q: That sounds like a lot of work.
PN: It is. And if you’re working with a plane that’s 20 years old or more, the parts supply has dried up. The fleet that it was a part of is probably gone.
Q: How long does it take to take part an entire plane?
PN: We budget 1,500 (working) hours to do a large plane, 1,200 hours for a medium plane and about 900 hours for a small plane. You do the easy things first, then it gets tougher. It might take three or four hours to remove one part.
Q: Is this profitable?
PN: We’re turning a 20 percent to 30 percent profit. Gross revenue is $3.5 million to $4 million a year. That’s pretty good.
Q: How many people do you have working in the program?
PN: We’ve had a high of 20 employees at any one time, all the way down to seven or eight.
Q: What are their backgrounds?
PN: We’ve had kind who were right out of school, mostly Chaffey College and Mt. San Antonio College. We’ve had automobile mechanics, motorcycle mechanics. We’ve hired some kids without any experience, but they did show some mechanical aptitude. It’s a training ground, a good place for them to get their feet wet.
Q: Where do the parts you can’t recycle end up?
PN: We send all of that to a scrap yard in Fontana. We put the fuselage on a flatbed truck and haul it there. They’ve got a huge grinder, and they drop the whole thing in that.
Q: is there a way of estimating how much revenue a recycled plane will generate?
PN: It depends on the plane. A Gulfstream or a Bombardier General are bigger, so their parts are worth more. But there are other things you have to consider, like is there any life left on the engine? You do that because that’s where you’re going to make most of your money. The engines are usually about 80 percent of a plane’s value.
Q: How is a plane recycled? What is that process like?
PN: All of the fluids are drained out of the plane, then we move it a hangar. First we take the engines out, because those are the most valuable parts of the plane. Then we remove the plane’s interior, and we take off all of the external panels so we have access to everything.
Q: It sounds like an autopsy.
PN: Yes, it does.
Q: Is it true that as recently as 25 or 30 years ago, airplanes weren’t recycled, that they were almost always sent to landfills when they couldn’t be flown anymore? Why was that?
PN: Yes, it’s true. In those day there wasn’t a market for the parts. People didn’t want to buy them, but now they do. Despite being a repair station, there are still limits to what we can do We can only recycle planes that we have been trained on, and that we’re familiar with. We can’t just disassemble anything.
