Out Of Alice

The move will take accommodation for aircraft from a present maximum of 25 to more than 60 stands.

APAS founder and managing director Tom Vincent said the “pipeline” of requests for space on the present 15 hectares lease by the company from Northern Territory Airports was building up, and had led to the decision to invest in new infrastructure.

“We’ve done all the infrastructure planning and almost finalised the financing,” Vincent told Australian Aviation. “The timing all comes down to the business pipeline. ” The proposal to build an aircraft storage facility at Alice Springs Airport, with its advantages of a dry desert climate, 24-hour operations, a runway capable of handling the largest aircraft such as Boeing 747s and Airbus A380s, had its inception in 2008.

Vincent, a former Brisbane lawyer, had worked with international banking giant Deutsche Bank in London, handling among other things distressed assets and trading in bank debt and liquidation claims. The work took him into contact with aircraft leasing, and sparked his interest in the concept of the housing, recommissioning and dismantling of surplus aircraft.

With a group of Brisbane investors, who remain “100 per cent” behind the business, he says, the plans were advanced, and negotiations started with Alice Springs Airport for a 110-hectare site on the airport’s expansive 3,550 hectares – one of the largest airport holdings in the country.

In 2011, APAS gained an initial 10-year lease and began work on the necessary infrastructure on the site, across the airport from the present passenger terminal and other airport facilities.

NT Airports will not comment on the project and its commercial implications but its 2015 Master Plan says about 1,930 hectares of land at Alice Springs is available for commercial developments, including workshops, offices, retail outlets and warehousing. The land bank includes 100 hectares for potential further development of the APAS facility.

Vincent will not divulge the cost of establishing – and now expanding – the project, describing it as “a multi-million dollar niche asset” for the international aviation industry.

Apart from the aircraft stands, APAS has built a workshop on its site to handle the engineering requirements of aircraft, to keep them at – or bring them up to – full operational standards, and carry out the dismantling of high-value parts, particularly engines, for servicing and resale.

Engines, says Vincent, amount to about 80 per cent of the residual value of surplus aircraft.

However, of the 25 aircraft which have passed through the facility since the first arrival in June 2014, only one – a Boeing 737 – has been stripped for its engines, avionics and other valuable parts.

The rest, which includes Boeing 777s, an A330 and four A320s of Tigerair, have been temporary visitors, held in Alice Springs as surplus capacity until required or en route to new owners. Three retired Boeing 767s from Qantas, for instance, have found new life with overseas owners as freighters, after a stay at Alice Springs Airport.

When you consider we received our first aircraft only two years ago, a lot has happened.

“All but one of the 25 have been reactivated,” Vincent says, a trend likely to continue as larger airlines re-equip with new aircraft with lower operating costs and their surplus aircraft are picked up by other airlines or air freight companies.

Vincent travels frequently, particularly in Asia – which is considered the prime market – but also to Europe and the US to talk to potential customers.

At the time of writing APAS had 10 aircraft in its parking bays, including two Boeing 777s belonging to Singapore Airlines and a Boeing 767-300ER received from Air New Zealand on October 5. The aircraft has been sold to Icelandair, the second 767 to be bought by that airline and stored at the Alice Springs facility.

Meanwhile, Vincent said, the storage outfit was “in constant discussions” with several airlines and aircraft leasing companies for additional deliveries over the final months of the year.

These potential arrivals include 777, 737, A320 and ATR 42/72 aircraft.

Although some aircraft have been held for short periods – as little as three months – Vincent says the average time is 14 to 16 months. While there, they need the regular attention of APAS’s engineering staff to ensure they remain airworthy. They can’t be left to simply sit in the dry atmosphere and the company has a pool of about 25 aviation engineers to draw on, depending on demand.

APAS holds coveted CASA and EASA part 145 engineering approvals, enabling it to carry out engineering work on a variety of aircraft, including all current Boeing types. It is in the process of obtaining FAA approvals in the US.

The Australian storage company does not see itself as a rival to the huge US storages – the 840 hectare Pinal Airpark in Marana, Arizona and California’s Victorville on the edge of the Mojave Desert.

“We don’t expect to see US-registered aircraft here,” Vincent says. “Our proximity to Asia provides our main market. ” However, while the bulk of its present work comes from Australian and Asian airlines, the company believes that, through its European and pending US engineering approvals, it can gain valuable work from international aircraft leasing firms.

Particularly, Vincent sees maintaining European-registered aircraft from leasing companies as a potential new market. But, so far, APAS has not sought to enter the third-party aircraft maintenance industry for its autonomous workshop.

“When you consider we received our first aircraft only two years ago, a lot has happened,” Vincent says. “We believe we can expand the present business with organic growth. ” So, after our interview, he was off to Singapore and Indonesia, for talks with clients and to market the advantages of parking surplus aircraft in his unique, remote facility. Then it was on to the US to progress the quest for FAA approvals.

Meanwhile, the plans to expand the facility are being advanced. Ultimately APAS’s 110-hectare lease area could house up to 300 aircraft.

Not that Tom Vincent is prepared to put any timeframe on such a prospect.

But the amiable managing director is confident about the future. With IATA continuing to forecast strong aviation growth in Asia, he believes demand will increase steadily for the facility’s services.

And the embryonic “boneyard” aspect of the business could become more important as airlines in the region retire older aircraft which may have international markets for their engines, avionics, APUs, control surfaces and other reusable parts.

“It’s a market we’re pushing into,” Vincent says.

That business prospect is helped by the fact that Alice Springs can be reached by freighter aircraft from hubs around Asia. And larger parts, such as fuselage sections, could be carried on the Adelaide-Darwin railway for shipping overseas.

Qantas has expressed support for the APAS facility, and backed its view by ferrying three Boeing 767s to Alice Springs for storage, on their way to new owners.

So as it moves to line up funding for stage two of its development, is it likely that APAS might seek to float on the sharemarket to capitalise on its promising start to business life? “There are no plans to take the company public,” Vincent says, emphatically.