September/October 1993
Fasten your seatbelt and hold on!
Opportunities to recycle metals from retired aircraft are taking off, thanks to federal aviation regulations and arms reduction treaties.
BY ROBERT J. GARINO
Robert J. Garino is director of commodities for the Institute of Scrap Recycling Industries (Washington, D.C.)
Looking for a B-52 to recycle? How about a Boeing 707?
While never considered a primary source of material for the scrap recycling industry, a growing inventory of aging commercial and military aircraft may yet offer recyclers increased tonnages of aluminum, steel, copper, and precious metals. In the commercial sector, new opportunities are arising thanks to relatively new noise minimization requirements that may accelerate aircraft obsolescence. And on the military aircraft front, arms reduction treaties are already boosting this niche market.
Out With the Old
It's a fact of life that everything ages, including airplanes. While aircraft, properly maintained and inspected, can reportedly fly indefinitely, statistics suggest that major commercial airlines will increasingly have to decide whether to maintain and upgrade their fleets, or sell them for recycling and parts recovery. According to the U.S. General Accounting Office (GAO), approximately 32 percent of U.S. commercial aircraft were 20 or more years old in 1989 (see Table 1 on page 50). That same year, about 25 percent of U.S.-manufactured planes in service worldwide were also at least two decades old, the GAO says, and projections indicate that this aging trend is likely to become more pronounced in the future. From 1989 to 2000, in fact, the number of U.S.-made aircraft 20 years old or older in use around the world could more than double, rising from 1,783 to 4,474 (see Table 2 on page 50). Furthermore, by 2000, 64 percent of the worldwide fleet of U.S.-manufactured aircraft will be 20 or more years old, assuming no replacement or attrition, GAO reports.
Though this might sound at first like a huge recycling opportunity, most airline companies are likely to refurbish their aircraft rather than replace them because planes are simply too expensive to remelt for their scrap metal value. Just how expensive are they? The average price of a new aircraft is about $55 million, with a new Boeing 747 costing $150 million. In contrast, a major overhaul usually runs between $2 million and $4 million, depending on the extent of work being performed. Aircraft that can't be reconditioned to fly are typically stored for parts (for a discussion of aircraft storage, see "The Business of Aircraft Storage" on page 52), and only after they have been picked clean do traditional scrap processors have a shot at them.
Of course, commercial aircraft routinely do get recycled, though the number of planes that enter the scrap stream is imprecise and small. According to one published source, only about 100 commercial aircraft were scrapped in 1992, but more could be recycled soon, especially if the Clinton administration's proposed federal loan guarantees are adopted. These loans are designed to help the airline industry secure much-needed capital to purchase quieter, more fuel-efficient planes as required by Federal Aviation Administration noise-control regulations adopted in the early 1980s as well as more stringent rules introduced in 1991, which will virtually phase out noisy aircraft by 2000.
The Military Front
As for the military, it is also difficult, if not impossible, to track numbers of aircraft scrapped or quantities of metals recovered. Nevertheless, it's clear that military aircraft scrap sales far outdistance those for commercial and private aircraft. In fact, the U.S. government has been scrapping old military planes consistently since the mid-1940s, and continues to do so through the Defense Reutilization and Marketing Service (DRMS) (Memphis, Tenn.), which holds monthly bid offerings on a variety of military-related materials. Most of the military aircraft offered are actually sold as usables (listed as "commercially salable" and "combat-type requiring demilitarization" ) and many planes end up as display models, movie props, or training aids for firefighters, among other uses. Nevertheless, some are sold as scrap—usually advertised as "scrap irony aluminum: from wrecked aircraft."
One of the earliest—if not the earliest—military aircraft recycling efforts took place immediately following World War II, when 7,000 surplus bombers and fighters—primarily B-17s, B-24s, and B-26s—were dismembered and fed directly into on-site furnaces in Kingman, Ariz. Crews had to work three shifts, seven days a week, for two years to complete the task, and by the time the furnaces were torn down in 1948, 70 million pounds of aluminum had been recovered, mostly in the form of 1,500-pound ingots.
A similar operation was established in the mid-1950s, when a portable secondary aluminum smelter was erected at an abandoned Navy base north of Phoenix to melt several hundred World War II torpedo bombers. Though each fuselage yielded a respectable 3,000 pounds of aluminum, the overall tonnage recovered was considerably less than that reclaimed from the aircraft at Kingman.
A B-52 Bonanza?
Today, exciting opportunities are emerging for scrap recyclers in the military aircraft sector as a result of the Strategic Arms Reduction Treaties—START I and START II—negotiated between the United States and the former Soviet Union. (For a related story, see "Bombs Away! Recycling Nuclear Weapons" in the May/June 1993 issue.) Under the START II agreement, signed by President Bush in early 1993 but yet to be ratified by Congress, approximately 350 B-52s are scheduled to be recycled by the end of this decade, with 100 of them now being scrapped or slated for recycling in the next few months.
Most of these planes will come from the Davis-Monthan Air Force Base's Aerospace Maintenance and Regeneration Center (AMARC) in Tucson, Ariz. As of mid-1993, the 2,600-acre base—nicknamed "The Boneyard" and described as "a roost for bandaged war birds"—was home to about 4,200 planes, and more are on the way, says Col. Bruce Rianda, AMARC's commander. "Last year, 996 came in," he says, "the highest number since the end of the Vietnam War. This year we're looking at 700 or 800 more planes showing up."
Many of these aircraft will be sold to civilians or foreign governments. Relatively new F-16 Fighting Falcons, for example, will soon be heading to Pakistan , Rianda notes, while other countries such as Thailand, Greece, Argentina, Turkey, Australia, and Chile have expressed interest in acquiring everything from Navy P-3 antisubmarine aircraft to F-4 Phantom fighters, some of which have red stars on their fuselages denoting Mig kills over Vietnam. In addition, any unsold planes will be inventoried for parts, adding to the hundreds of millions of dollars worth of spare parts currently held by AMARC.
Still, in the months ahead, DRMS will begin selling off the initial 100 B-52s required under START II in what could be the start of the biggest aircraft scrapping effort ever. After being stripped for parts, the B-52s will be cut into five pieces—two wings plus the fuselage cut into three sections—using two guillotines dropped about 60 feet from a 140-ton crane. Among the five pieces of a dismantled B-52 are about 100,000 pounds of scrap metal, primarily high zinc-containing aluminum alloy, as well as steel and around 7 miles of copper wire, including silver-coated material, according to Jerry Fugere, AMARC's marketing analyst. The 100 B-52s initially slated for recycling are expected, therefore, to yield about 10 million pounds of scrap. And assuming that aluminum is around 60 percent of the 100,000 pounds of scrap per plane, the 350 B-52s targeted for recycling by 2000 could yield about 10,500 tons of aluminum.
In the 100-B-52 effort now under way, AMARC is cutting up about one plane per day, which is expected to keep the center busy through early February, Fugere says. Offerings will be in lots of 1 million pounds, or 10 aircraft, with the first offering appearing around the end of October. This timing is dictated by terms in the START II treaty, which require the cut-up aircraft to remain in place for 90 days to allow Russian surveillance satellites to verify U.S. scrapping efforts.
Naturally, the price of this B-52 scrap will depend on market conditions and bids offered, but AMARC notes that it sold 10 dismantled B-52s last fall for an average price of 12 1/2 cents per pound—for a total cost of $12,000 per plane. While buying aircraft scrap may seem enticing, there is one notable downside to this unusual opportunity: Winning bidders generally have to further dismantle the planes to be able to move the metal off-site for final processing.
The Processing or Parts Decision
Recycling firms that buy aircraft scrap generally have two options, with the first being to process the metal into marketable scrap commodities. This is the approach taken by Ben Klimist, president of National Aircraft (Tucson, Ariz.), which has experience cutting up B-52s. When recycling such aircraft, National Aircraft removes all remaining parts and as much steel as possible before melting the remaining aluminum in a sweat furnace. The firm pours the metal into remelt sows that are marketed both to domestic and offshore secondary aluminum smelters.
The other option is to dismantle the scrap aircraft and recover usable parts, says Larry Kotz, president of Tucson-based K-Tech Aviation. Kotz, who has participated in his share of B-52 cut-ups, asserts that today it's more profitable to sell parts and pieces than to melt and upgrade scrap. "We think of airplanes in terms of the number of parts, not the number of pounds of aluminum," he says. "We may buy by the pound, but we sell by the piece," an approach that reportedly enables his firm to outbid more traditional scrap processors by "two to three times." This parts niche, Kotz notes, has grown over the years at his processing facility. "It's far more profitable, plus I don't have long-term environmental issues to worry about," he confides. "Metal melters today have to be state-of-the-art."
Whichever approach recyclers decide to take, it appears that all systems are go for airplane recycling and that this market niche looks to be taxiing down the scrap runway, ready to take off. The potential increase in metal scrap availability due to anticipated replacement of commercial fleets and mandated scrappage of military aircraft could result in a much wider market. And while metal recovery may have limits, the parts business appears almost limitless.
The Business of Aircraft Storage
Where do old commercial and military aircraft go when they retire or die? Up to that big hangar in the sky? Nope, usually they head for Arizona or Nevada , the aircraft storage meccas of the world. The deserts of these two Western states are home to literally thousands of aircraft—from B-52s to 747s—that scrap recyclers may one day process.
According to Airclaims (London) data, about 776—or 80 percent—of the current world inventory of stored commercial planes are located in the United States. Of that number, the vast majority are older planes that will likely never fly again, which means that these aircraft could find their way to scrap recyclers and consumers.
Although the number of commerical aircraft in desert storage has fallen since peaking out at around 1,000 last year, the types of planes found reflect the overall gloom in today's airline industry. Inventory data reveal, for instance, that 56 747s are in storage, representing around 6 percent of the world fleet of 941.
Firms specializing in storage, such as Evergreen Air Center (Morana, Ariz.), look first to recondition and resell airplanes intact. Most of the 90 planes stored at Evergreen's 2,000-acre site will eventually fly out, says Wallace P. Flannery, vice president, and those that don't will be thoroughly dismantled. "We'll remove everything from the avionics to upholstery," he says. "What's left will be sold as scrap." In one recent sale, the firm sold an old Boeing 707 fuselage containing about 15,000 pounds of metal for $3,000.
While Evergreen's primary objective is to keep planes airborne, aircraft sound suppression requirements may render more planes obsolete and beyond cost-effective reconditioning, Flannery asserts. Consequently, he says, this may increase the number of civilian aircraft sold to recyclers as scrap. —R.J.G.