Reflecting on the ISTAT Dublin Hub 2024

Two words spring to mind when we look back and reflect on this year’s ISTAT Dublin Hub, positivity, and clarity.

Positivity was certainly in the air throughout our conversations at the event, and with IATA’s 2024 forecast having expectations of record airline revenue reaching $964 billion there’s even more support towards the notion of a positive year ahead, largely bolstered by record demand in passenger travel. Add to that the record number of aircraft backlogs and Boeing and Airbus hitting their best deliverers since 2018, the trend is moving in the right direction; but we are not there yet in terms of Aircraft transitions and retirements.

We are supportive of the forecast and what it means for the wider industry, but at the same time, prepared for a potentially turbulent journey ahead. As the sector settles to a level of relative normality, there will continue to be adjustments at operator and regional levels from macro-economic factors, leading to aircraft being phased out, possible reductions of fleets and airlines being at risk of continued operation.

In terms of clarity, we see many lessors and airlines now normalising their operations around a constrained environment, enabling them to make clearer decisions. That is very different to previous years where the volatility has made it very difficult to do that.

It is clearly a seller’s market at present, creating demand and competition for aircraft, engines, and components. Asset owners are directing aircraft to us to access the engines and that will certainly see an uptick in phase outs, or at a minimum, short- to medium term storage programmes being established. However, it is highly likely that the primary focus for lessors and airlines will be around lease extensions, due to the lack of available in-service aircraft, so the phase out timeframe could be pushed to the right.

Both the positivity and clarity given at the event has solidified our strategic developments. We are enhancing our maintenance service offerings in response to the needs of our customers. Our three-prong approach of storage, disassembly and transition services were fully supported by our three core customer groups, airlines, lessors, and parts companies, all of which gave positive responses, especially in the maintenance space.

The need for quality disassembly services will of course remain, albeit possibly at a lower volume than what it once was in 2019, but we are confident that we are on the journey towards that.

The spine of the disassembly sector of course is and has been the A320 and 737. In fact, 90%+ of all the aircraft we disassembled last year were those models. This year however, the mix is far wider, we are already forecasting completing more widebodies than we have in the last two years, and we’ve seen a spike in regional jet enquiries, not just the obvious E-Jet family but also CRJ and ERJ 145s too.

The passenger demand for these aircraft is increasing so there’s an uptick in parts demand and therefore buyers demand of these aircraft.

Let’s watch this space.