High demand and low supply of parts looks set to continue drive down the age of aircraft that are being torn down for engines and parts.

Lessors and parts suppliers speaking in a panel about maximising asset values, agreed that they are continuing to see issues with next generation engines and supply chains.

Neil Wilson, senior vice president sales and marketing and head of EMEA at SMBC Aero Engine Lease, said: “The engine space is really tight at the moment.

“This is across all OEMs; there’s none who is any better off than others. It’s extremely tight. That’s driving different behaviour in the engine space.”

Wilson added that this means people are paying “an awful lot more for an aircraft or engine because demand is so high.”

“It’s a very strained market, especially on the engine side. Some aircraft being parted out are just six years old just to get the engines because you can lese the engines for more than the aircraft,” Wilson said.

“I would love to be able to generate additional engines but they just don’t exist. It’s actually a frustrating time to be an lessor.”

Ongoing reliability issues on the latest Leap and GTF engines are driving the trend as both short- and long-haul airline operators are operating older more predictable hardware for longer.

Craig Skilton, Vice President Components at APOC Aviation, said: “The age of the plane has become a little less relevant, it’s more can we extract that value.”

Lee Carey, chief investment officer at EirTrade Aviation, said he doubted much of the backlog in production from Boeing and Airbus will ever be made up.

“Talking about aircraft that have not been produced over the last few years is just pointless,” he said transitioning young aircraft is a way for operators to recover lost income due to delays in getting aircraft back into service.

Carey said EirTrade Aviation currently has two six-year-old aircraft it is tearing down and expects to complete a deal soon for a three-year-old aircraft.

The company was the first to tear down an A380 when it was just 11 years old. Carey said there is demand for A380 material, but the market is constrained due to the relatively few number of operators.

Pascal Parant, chief commercial and marketing officer at Vallair Group, said there are many older aircraft still in operation with 90% of leases having been extended, while 20% of the GTF-powered A320 are on the ground.

Parant said smaller airlines do not have the clout to demand support from the OEMs, so will look to recoup their $40 million investment in an aircraft.

“We are in a very interesting position today. I’m not saying we are in a bubble but if the airline wants to keep flying they have no option.”