The Role of Used Serviceable Material in Reducing Airline Maintenance Costs

Author: GA Telesis

In today’s competitive aviation landscape, operators are under constant pressure to reduce costs without compromising safety or performance. One powerful lever that is increasingly reshaping the economics of aircraft maintenance is Used Serviceable Material (USM). USM refers to aircraft components that have been previously used but are still airworthy and certified for reuse. These parts are typically sourced from retired or dismantled aircraft and undergo rigorous inspection and certification processes to ensure their quality. With today’s drive towards lower overall Cost per Available Seat Mile (CASM), USM has emerged as a key strategic solution. When implemented efficiently, USM can significantly enhance operational performance, reduce downtime, and improve profitability across the aviation industry. Let’s take a look at all the areas where USM can improve overall maintenance management and cost efficiency for the operator.

Approved Vendor List Flexibility

The Approved Vendor List (AVL) is a critical component of an airline’s procurement and maintenance strategy. Historically, AVLs have been dominated by Original Equipment Manufacturers (OEMs) and a limited number of certified suppliers. However, the integration of the globe’s USM suppliers into AVLs has introduced a new level of flexibility and cost efficiency over the last decade.

Expanding the AVL to include reputable USM providers allows airlines to diversify their sourcing options. This diversification mitigates risks associated with supply chain disruptions and potential OEM lead times. It also fosters competitive pricing, as USM suppliers often offer parts at significantly lower costs than new OEM components. By leveraging a broader supplier base, airlines can negotiate better terms and reduce dependency on single-source vendors.

Moreover, the inclusion of USM suppliers in the AVL supports more just-in-time inventory strategies. Airlines can source parts at the last minute, reducing the need for extensive inventory holdings and associated carrying costs. This agility is particularly valuable in unscheduled maintenance scenarios, where rapid part availability can minimize aircraft on ground (AOG) time.

To ensure quality and compliance, airlines implement stringent vetting processes for USM suppliers. These processes include audits, certification verification, and performance monitoring. Suppliers must demonstrate that their distribution process and trace transparency management follow ASA-100 and FAA00-56 standards. In addition, the parts distributed must have quality certifications to regulatory standards, such as FAA 8130-3 and EASA Form 1, which certify the parts’ actual airworthiness.

In summary, the strategic expansion of AVLs to include USM suppliers not only reduces costs but also enhances operational resilience. It enables airlines to respond more effectively to maintenance demands and optimize procurement strategies while maintaining high standards of safety and reliability.

 

Low Acquisition Cost

One of the most compelling advantages of USM is its significantly lower acquisition cost compared to new OEM parts. On average, USM components are priced 20% to 40% lower than their new counterparts. This cost differential can translate into substantial savings, particularly for high-value components such as engines and landing gear.

The economic rationale for using USM is grounded in the principle of value retention. Many aircraft parts retain considerable functional life beyond their initial use. Through proper inspection, testing, and certification, these parts can be safely reintegrated into operational fleets. This reuse not only conserves environmental resources but also reduces the financial burden of maintenance.

For airlines operating under specific budget requirements, the cost savings from USM can be transformative. It allows them to maintain fleet safety, reliability, and compliance without incurring the high capital expenditures associated with new parts. These savings can be redirected toward other strategic initiatives, such as fleet modernization or overall customer experience differentiators.

USM also plays a critical role in managing maintenance reserves for leased aircrafts. The lessees can use USM to fulfill return conditions and maintenance obligations at a lower cost, improving the overall economics of aircraft leasing. The lessors, in turn, benefit from maintaining the overall value of their assets, making it more attractive for remarketing.

The pricing of USM is influenced by several factors, including part condition, serviceable tag, remaining life, demand, and market availability. Components with high demand and limited supply may command higher prices, while those with abundant availability offer greater savings. Market intelligence and data analytics are increasingly used to assess fair market value and optimize procurement decisions.

Aging Fleet Management

Managing aging aircraft fleets presents unique challenges. USM enables airlines to extend the operational life of older aircraft while controlling maintenance costs.

As aircraft age, the availability of new OEM parts often diminishes. Manufacturers may slow or discontinue production due to prioritizing newer models, resulting in longer lead times and higher prices for legacy components. USM fills this gap by providing a reliable source of parts for older aircraft types. These parts are harvested from retired aircraft, inspected, and certified for reuse, ensuring continued airworthiness.

The use of USM in aging fleet management supports a proactive, longer-term maintenance strategy. Airlines can stockpile critical USM components in anticipation of future needs, reducing the risk of AOG events. This approach is particularly valuable for aircraft fleet types that have gone out of production. By maintaining a ready supply of USM parts, airlines can ensure timely maintenance and minimize operational disruptions for years to come.

In addition to cost savings, USM contributes to sustainability in fleet management. Reusing serviceable parts reduces waste and conserves resources, aligning with industry goals for environmental responsibility. It also supports circular economy principles by extending the lifecycle of valuable assets.

Airlines that effectively integrate USM into their aging fleet strategies can achieve a balance between fleet extension as well as operational reliability. They can defer capital expenditures on new aircraft, optimize maintenance budgets, and maintain service levels in competitive markets.

Teardown Recall

Teardown recall is a cornerstone of the USM supply chain. It involves the systematic disassembly of retired or end-of-life aircraft to recover self-owned, serviceable, and non-serviceable components for use in one’s own fleet. The teardown process begins with the selection of suitable aircraft, typically those with high part commonality and lower overall residual asset value. Aircraft are dismantled in specialized facilities, where components are carefully removed, cataloged, and assessed for their value. High-value items such as engines, landing gear, avionics, and control surfaces are prioritized for recovery. This process not only supports cost-effective maintenance strategies but also contributes to the sustainability and supply chain needs of the airline.

The economics of teardown recall are compelling. The cost of recovering and certifying USM parts is considerably lower than the cost of acquiring or manufacturing new components, and drives significant closure to long-term supply chain demands. Additionally, teardown activities generate revenue for asset owners and lessors, who can monetize retired aircraft through the sale of third-party parts.

Supply Chain Lead-Time Reduction

In the fast-paced aviation industry, minimizing maintenance-related delays is essential. One of the key advantages of USM is its ability to reduce supply chain lead times, thereby enhancing operational efficiency and aircraft availability.

New OEM parts sometimes come with extended lead times due to production schedules, raw material and supply-chain constraints, and logistical complexities. These delays can result in prolonged AOG situations, increased maintenance costs, and lost customer revenue. USM mitigates these challenges by offering readily available, certified components that can be sourced and delivered quickly.

The availability of USM parts is supported by a global network of suppliers, distributors, and teardown facilities. These entities maintain extensive inventories of serviceable components, enabling rapid fulfillment of orders. Advanced logistics and digital platforms further streamline the procurement process, allowing airlines to locate and acquire parts with minimal delay.

Shorter lead times result in faster maintenance turnaround times (TATs) and reduced on-ground time, ultimately improving fleet utilization. This responsiveness is particularly valuable in unscheduled maintenance scenarios, where time is of the essence.

USM also supports predictive and condition-based maintenance strategies. By analyzing operational data and maintenance trends, airlines can anticipate parts needs and proactively source USM components months and even years in advance. This approach reduces the risk of stockouts and ensures that parts are available when needed.

Finally, there is a key element of cost savings in utilizing USM in many areas that are not so readily tangible.  Reduced lead times, as a whole, contribute to cost savings in both the short and long term.   By having USM available sooner, airlines can avoid expedited shipping fees, minimize inventory holding costs, and optimize maintenance scheduling. These efficiencies enhance overall maintenance economics and support more agile operations.

Impact of COVID-19

The COVID-19 pandemic profoundly disrupted the global aviation industry, grounding fleets, slashing revenues, and forcing airlines to reassess every aspect of their operations. In this context, USM emerged as a vital tool for cost containment and operational continuity. As passenger demand plummeted, airlines faced severe liquidity challenges. Maintenance budgets and schedules were among the first to be scrutinized. USM offered a practical solution in a variety of ways. By substituting new parts with certified used components, airlines could directly maintain airworthiness while significantly reducing expenditures. This shift was particularly important for carriers operating aging, out-of-production fleets.

The pandemic briefly accelerated aircraft retirements, increasing the availability of teardown assets and expanding the USM supply pool. Many airlines opted to part out aircraft that were no longer economically viable, creating a surge in USM inventory. This influx helped stabilize and even reduce prices, all while improving availability.

At the same time, supply chain disruptions affected OEM production and delivery timelines. Lockdowns, labor shortages, and logistical bottlenecks delayed the manufacture and shipment of new parts. Even raw materials for production were halted, causing a 2- to 3-year shift in supply timelines. USM filled this gap, providing a more resilient and responsive alternative. Airlines that had previously relied solely on OEMs began to diversify their sourcing strategies, incorporating USM suppliers into their approved vendor lists to mitigate risk.

The above conditions in the OEM supply chain challenges have created a backlog that is expected to persist through at least 2028, with lead times for certain components remaining significantly extended. In response, airlines have increasingly adopted flexible sourcing strategies, including consignment teardown and recall partnerships, as well as a greater reliance on USM, to mitigate long-term supply risks. This shift reflects a broader structural change in procurement behavior, emphasizing agility and resilience in maintenance planning.

The pandemic also highlighted the importance of digital transformation in airline and maintenance operations. Airlines and MROs are increasingly seeking ways to predict further and enhance maintenance practices, as well as procurement activities. Data science is also starting to appear in reliability studies to understand how to proactively change components during downtime before failures occur. Enhanced transparency, improved traceability, and facilitated compliance with regulatory standards are becoming the next step in the evolution of the USM revolution. Blockchain and AI-driven trace management tools, such as GA Telesis’ WILBUR software, are poised to play a larger role in verifying part provenance.

COVID-19 acted as a catalyst for the broader adoption of USM. It underscored the need for cost-effective, agile, and resilient solutions that were once avoided by many. As the industry recovered, the lessons learned during the pandemic continue to shape airline maintenance practices, with USM playing a central role in the new normal.

Sustainability and Environmental Impact

Beyond cost savings, USM makes a significant contribution to the aviation industry’s sustainability goals. The reuse of serviceable components reduces the demand for new manufacturing, thereby lowering the environmental footprint associated with raw material extraction, energy consumption, and emissions.

Aircraft manufacturing is a resource-intensive process, involving complex supply chains and generating significant carbon emissions. By extending the life of existing components, USM helps reduce the need for new production. This not only conserves materials but also minimizes the environmental impact of front-end manufacturing, logistics, and scrap waste.

Teardown and recycling processes are evolving further to support sustainability. Modern teardown facilities are designed to maximize material recovery and minimize waste. These facilities follow industry standard practices driven by the Aircraft Fleet Recycling Association (AFRA).

Components that cannot be reused are often recycled, and hazardous materials are disposed of in compliance with state and federal environmental regulations. This approach aligns with circular economy principles, promoting resource efficiency and waste reduction.

Many carriers have committed to reducing their carbon footprint and improving sustainability across operations.  Many have done so by the use of sustainable fuels and a more rapid incorporation of USM into maintenance strategies.  These commitments demonstrate responsible resource management and supports broader industry efforts to decarbonize aviation.

Moreover, sustainability is becoming a competitive differentiator. Passengers, investors, regulators, and even country governments are increasingly scrutinizing environmental performance. Airlines that adopt sustainable practices, including the use of USM, can enhance their brand reputation and stakeholder trust.

 

Regulatory Compliance and Quality Assurance

The use of USM in commercial aviation follows several industry frameworks, including FAA Circular 00-56, AS9120, and ASA-100, to ensure safety and regulatory compliance. The commercial trace documents that follow USM confirm that a part has been inspected, tested, repaired, and deemed fit for service, as well as providing transparency into the unit’s previous usage and life history. Quality assurance processes are integral to the USM supply chains for operators, MROs, and supplier companies. Reputable suppliers implement rigorous traceability reviews, part inspections, and self-auditing protocols internally to ensure customers can fly or maintain worry-free operations. On the airline and MRO side, quality systems verify the origin, condition, and certification status of each component. The airlines and MROs are continuously vetting suppliers to ensure compliance with the approved vendor list protocols. Only suppliers who meet strict quality and compliance criteria, as determined through regular audits, performance reviews, and compliance checks, remain on the AVL.

Market Acceptance

Today, there are still broader market acceptance challenges that remain open with USM. The primary challenge lies not in the technical reliability of USM, but in its perception and regulatory treatment. In some jurisdictions, particularly in parts of Asia and the Middle East, there is still hesitancy to adopt USM due to engineering preferences for new components and conservative regulatory frameworks. Countries like China have historically been slower to integrate used parts into commercial fleets, but even their times are changing. With the adoption of practices listed in ASA and AFRA, even China is now coming on board with its own frameworks, such as CAMAC certifications. But as a whole, the limited acceptance of USM restricts the global scalability of the product and creates disparities in cost-saving opportunities. As the aviation industry continues to evolve, harmonizing international standards and fostering regulatory openness will be essential to unlocking the full potential of USM across all markets.

Conclusion

Used Serviceable Material has become an indispensable element of contemporary airline maintenance strategies. It provides significant cost savings, reduces lead times, supports aging fleets, and enhances sustainability, all effectively addressing various challenges within the aviation industry.

The coronavirus pandemic further highlighted the vitalness of USM and accelerated its adoption, demonstrating its role in ensuring operational resilience. As regulatory frameworks continue to morph and digital tools improve traceability and quality assurance, the credibility & utility of USM are set to increase.

GA Telesis’ unique position within the USM market has positioned the company as a leader in providing the right part at the right time. The organization has been able to strategically position is inventory across the globe to supply airlines around the world with reliable inventory. The company has been able to continue to set itself apart from its competitors on a global scale.
For airlines aiming to optimize their maintenance costs while ensuring safety & performance, GA Telesis’ USM presents a reliable and strategic solution. The integration of procurement, repair, inventory management, and sustainability strategies will be a crucial factor in driving competitive advantages for airlines.