Q1 2026 part-out trading: Firms buy more 737s for tear down
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Ishka’s research suggests that approximately 33 aircraft were acquired for part-out in Q1 2026 based on public disclosures from the largest tear-down firms. Tear down firms acquired a total of eight 737 and six A319s in the first quarter.
Several airlines have been phasing out A319s in favour of larger narrowbodies. easyJet, for example, is phasing out its A319 fleet by 2030 and replacing the aircraft with A320s and A321neos, while British Airway is replacing its A319s with A320neos and A321neos.
FTAI Aviation was a notably active buyer this quarter, acquiring seven aircraft for teardowns, including A318s, A319s, and A321s while Setna iO acquired six aircraft split between Boeing 737 and A330s.
Source: Ishka research based on company announcements
Will Iran fall out lead to more part outs?
The number of part-outs and retirements have been artificially depressed in recent years as airlines sought to use older aircraft due to both disappointing new-engine performance and reliability, as well as the reduced influx of new aircraft deliveries due to multiple supply chain issues. There has been a continuing debate about when the number of aircraft retirements will increase: (See Insight: ‘All hell will break loose by 2030’: aircraft part-out firms debate retirement spike)
Leasing sources talking to Ishka in May predict a rise in aircraft retirements following the fallout from the Iran war, which many will fear place heavy operational costs due to the higher fuel prices, and lead to a greater number of airline restructurings or insolvencies.
One of the notable recent airline insolvencies has been Spirit Airlines which is in the process of winding down its portfolio via the US courts (see Insight). Sources suggest that in addition to more A320ceo teardowns, Spirit’s liquidation, could result in more GTF-powered A320neos sold for part out (see Insight). In February, EirTrade Aviation stated it was set to part out some of the youngest A320neos to date after acquiring two ex-Spirit A320neos MSNs 10769 / 10921 for teardown (approx vintages 3.5 and 4 years). In March, Ishka reported that one lessor was negotiating the price for a portfolio of 14 A320neos, rejected by Spirit, for potential teardown.
It is still unclear how many A320neos will actually be parted out this year, not just from Spirit, but also from IndiGo (see Insight). As previously reported by Ishka, some sources state that only 20 to 25 A320neos will hit the USM aftermarket, which would match 2025 figures.
Not everyone agrees that there will be a dramatic increase in part outs. Speaking at a recent ISTAT learning lab part-out firm AerFin argued that there will not be a boost in retirements, instead describing a landscape where airlines are delaying retirements, and so reiterating the need for USM for the next decade. AerFin anticipates “some form” of retirement normalisation, but not the anticipated bow wave. Instead, the part-out firm believes that there will be a “gradual phase out driven by technical or fleet age planning.”
“There will be some level of unlocked late retirements. We may see that brought forward by events in the Middle East. Whether we see, not a bow wave, but at least an uptick in retirements as we get towards mid back end of 2026 remains to be seen. But fundamentally, USM as a decision-making solution for airlines, MROs, lessors, and OEMs, is going to continue to be a significant factor over the course of the next five and into the next 10 years. We will see some form of retirement normalisation, but it won't be a bow wave, and that demand for USM will continue over the next decade and beyond,” according to James Bennett, AerFin’s chief commercial officer.
The Ishka View
It is hard to disagree with AerFin on the continuing need for USM. However, the remarketing challenge currently facing many lessors is substantial as most airlines dramatically revise their fleet plans to accommodate higher fuel prices. Ironically, parts shortages and lengthy MRO turnaround will likely push more lessors to part out to avoid the continuing costs associated with storage and transition costs.
There is a natural lag in reporting transactions, many of which are bilateral and not publicly disclosed, so it is not clear if the spike in part out activity will necessarily be captured in Ishka’s Q2 figures. But given the likely extended nature of the fuel price crisis and the fact that some lessors will have to make some near-term, or immediate decisions, Ishka believes tear down firms are set to have a fairly busy summer.
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