AIN Blog: The Big Flush?

 - September 18, 2017, 5:00 PM
ADS-B installation
While many aircraft will be updated to meet the FAA's 2020 ADS-B equipage mandate, the big question amongst the industry remains: how many will not? (Photo: Duncan Aviation)

The FAA’s equipage mandate for ADS-B is now less than two-and-a-half years away, as the MRO shops that specialize in such work continually remind us. Warnings of limited manpower and maintenance slots are given on a near-daily basis in an effort to spur operators into locking up appointments and giving the maintenance providers some scheduling surety, yet, according to research by Duncan Aviation, “in the 29 remaining months before the FAA’s deadline to comply with its ADS-B mandate, roughly 70 percent of the business jet aircraft flying still have to upgrade for ADS-B.”

In July, speaking at EAA AirVenture, FAA administrator Michael Huerta warned the general aviation community for the umpteenth time that the Jan. 1, 2020 equipage mandate will not slip. That has some in the industry expecting a stampede on avionics shops as owners suddenly wake up and realize that their aircraft will be rendered AOG if not in compliance with the looming mandate. “The expected demand is real, and everyone knows it,” noted Aircraft Electronics Association vice president Ric Peri, in his column in the August issue of the association’s newsletter. “Yet people choose not to make reservations.”

He likened the situation aircraft owners will face as the deadline approaches to trying to get a table at a popular restaurant on a holiday. “Because someone doesn’t make a reservation isn’t a failure of capacity, it’s a result of their own procrastination, despite knowing there is an expected demand,” Peri noted.

In my mind, I have a vision of private jets lined up outside the doors of avionics shops as far as the eye can see, their owners rending their hair and cursing their procrastination, as the clock strikes midnight on December 31, 2019.

But what if that is not to be? Perhaps this looming mandate will serve as the “extinction event” for all of those aged jets that might have many flight hours left on their airframes, but whose values plummeted in the aftermath of the global economic downturn, and whose owners have doggedly held on to them in hope that their investment in them would rebound over time. For them, that time may be running out.

Clearly many of those owners of older aircraft are wrestling with the cost of ADS-B equipage, which ranges from a few thousand dollars on a small aircraft, to hundreds of thousands for a Part 25 business jet, versus the aircraft’s expected future use and value. For those who are also pondering the economies of major inspections on their aircraft, that just may be the tipping point.

According to industry data provider JetNet, of the 13,604 operational North America-based business jets and turboprops 15 years and older, only 1,834 or 13 percent have been equipped with ADS-B thus far. For those 14 years and newer, the rate is more than doubled at nearly 30 percent. Industry experts often point to the significance of 25-year-old aircraft. “After year 25 the airplane utilization starts significantly dropping as well,” noted analyst Rollie Vincent. “That airplane is probably with its last owner, especially if it’s a jet. Their utilization starts dropping and they get parked.”

While 21.8 percent of the 1992 models still in service in North America have been updated, that percentage declines for all the remaining years on JetNet data list, right down to the lone 1965 vintage aircraft of the 26 left in service, which someone decided to retrofit.

I think its going to divide the wheat from the chaff in some areas, because some of these aircraft aren’t worth that much any more,” said Vincent, adding that the industry could benefit from a cleanout of older airplanes. “There are too many aircraft in the system right now and they’re living longer than we ever expected them to.”

Some of those aircraft might migrate to places unaffected by the mandate, their owners likely aware that the jets face permanent banishment from the U.S. and other airspace that requires the upgrades. A few might be donated to training institutions, while many will doubtlessly be sold to companies such as Florida-based CRS Jet Spares, which will part them out to support the dwindling number of those types still in service.

Once the engines are disconnected, and every last usable component and fitting is removed, the carcass must be disposed of as well. There is no “elephant’s graveyard” where they are all taken. According to CRS’s Jack Caloras, the company's vice president of sales and marketing, most such airframes are contracted to local metal recycling firms to cut up on their way to becoming beer cans. “It’s worth very little as mixed metal in salvage,” Caloras told me. “Hopefully you get enough money to buy your crew a nice dinner.”