Dortmund - The leasing company Dr. Peters Group has decided to dismantle the first two Airbus A380 returned by Singapore Airlines at the end of their contract terms because they have not found customers.
Two of the four A380s (MSN003, MSN005, MSN008, MSN010) rented for the last ten years by Singapore Airlines and returned to the Dr. Peters Group at the beginning of the year will be dismantled and put on the spare part market, as announced on June 5 by the German company.
After long and intense negotiations with various airlines such as British Airways, Hi Fly, and Iran Air, Dr. Peters Group has decided to sell the components of the aircraft and will recommend this approach to its investors,the German company said in a statement.
Alternative options negotiated for new leases did not meet investors' requirements for an appropriate result. Even the sales of the aircraft, which had also been considered, did not meet the conditions required by the Dr. Peters Group.
The sales of the parts will be carried out by American VAS Aero Services, a leading provider of aircraft parts. During the two-year process, Dr. Peters Groups and the investors expect $45 million from the sale of the components, based on preliminary calculations by VAS Aero Services.
The main reason for this high rating is that many airlines currently using the A380-800 will have a strong demand for individual replacement components due to future maintenance intervals,says Dr. Peters Group.
The Rolls Royce Trent 900s have already been uninstalled and returned to the British engine manufacturer, but the German company says its strategy is to continue the existing engine rental agreement.
The main components such as landing gear and APU's will be sold very quickly and Dr. Peters Group expects to make the first payment to investors in the first quarter of 2019.
Anselm Gehling, CEO of the Dr. Peters Group, pointed out that the market for the superjumbo has been narrow in recent years, some airlines have canceled orders from Airbus, others have opted for smaller long-haul aircraft.
The retail sale of parts will meet or exceed the current expectations of our investors, which is our main objective. By following this strategy, Dr. Peters Group achieves a good result for its investors in the current market environmentadds the group which expects an overall return of 145% to 155% for investors.
The decision should be endorsed at a board meeting on June 28. Negotiations on the other two A380s, held by a separate fund, continue.
We can not comment on the decision of the Dr. Peters Group, who owns the aircraft. We remain confident in the used market for the A380 and in the potential to expand the base of operators,said an Airbus spokesperson.
Since the beginning of the year, the European aircraft manufacturer received an additional order of 36 A380 from Emirates Airlines. In April, the Portuguese leasing company Hi Fly acquired its first used A380 and expects a second copy to join next year. Singapore Airlines is also expected to lease its fifth A380 in the coming weeks.