TEARDOWN & CONSIGNMENT Case Study
The Proof: Close to 2x Whole Asset Value
A 2005 Airbus A319-112. Low landing gear life remaining, an older APU part number, and a market that priced the whole airframe at $900k in mid-2022. The kind of asset that gets sold whole and forgotten. Instead, it has returned $1.7M in consignment after all costs and returned over $100k post consignment. Same aircraft. Same market. Different approach.
Leasing companies are excellent at leasing. That can be the problem. Without the volume to justify a dedicated team, end of life lands on people managing leased assets. Multiple consignees report in different formats that mean different things making it more confusing. And with investor returns already met through lease income, teardown becomes a responsibility to the process, rather than the outcome. Nobody asks what was left on the table, because nobody sees it.
First Step; Build the Case Before the Decision
SellUe got involved before the whole-sale-versus-teardown call was made. Initial consignment modelled a $1.25M return – making a whole asset sale likely. Reviewing the model with the consignment seller included an updated market check and a flip from 60% AR/40% SV to 40% AR/60% SV, lifting modelled topline revenue from $2.29M to $2.62M. Separation of services cut costs, lower COGS forecast, and lower commissions added $65.6k. Agreed model: $1.45M return before a single part came off the aircraft, every dollar agreed by the consignee as achievable – consignment was the decision.
Second Step; Separate the Services, Pick the Right Seller
Bundled teardown, storage and sales hides cost. Teardown shop was contracted separately as was the warehouse with the primary requirement an on-line portal through which the consignee could manage all the material transactions remotely. Then the critical decision, the consignee itself: past success means nothing if they took assets like yours in the last six months. Your parts just join the queue, so a careful selection process required. Competitive rates followed across all services, plus a lower commission from a consignee whose only job was selling. Endgame, this consignee had no competing assets and an excellent mindset to optimising the outcome.
Third Step; Measure Everything, Hide Nothing
OPTIC leans, validates, layers and colour codes the data, presenting all assets in a common reporting format, so performance to model is visible in minutes: top level on the OPTIC phone app, deep transaction detail on a laptop. PN returns to model, realistic quote conversion measures, quote activity to sales targets, and a monthly end-of-project forecast by Tier and sale probability. Actual Outcome contributors: PN pricing above model +$258.9k, repair cost 25% to 24% +$16.1k, other COGS 20% to 19% +$49.9k.
Four Ways to Value One Aircraft
Same airframe, same 2022 starting point. Here is what each route delivers:
Whole Asset Sale: $900k. Fast, clean, done. Also the lowest number on this page.
Traditional Consignment: $1.25M modelled. Better, but this is consignment on autopilot: interest fades after nine months and the lower Tiers are left to fend for themselves.
SellUe Aligned Model: $1.45M, agreed before teardown simply from getting the model, the services and the seller right.
SellUe Actual: $1.7M returned from consignment after all costs, the focus on every process stage along with enduring focus across consignment timeframe. 1.9x market value, ahead of original model by $450k and the aligned model by $250k.
Still selling whole?
More to Come
All the above was achieved prior to dynamic pricing, deep dive modelling, and project contribution becoming available. OPTIC was recognised as Most Trusted Aviation Management & Reporting Platform 2024, Europe. The last article, next week, will talk to the general mindset and our experience across other airframe types culminating in decision time – yours.
The Bottom Line
A $900k airframe became $1.7M. Not through luck or a hot market, but through early intervention, separated services, the right seller, and metrics nobody could hide behind. The value was always in the asset. The only question is who gets it out.
You decide if 2x is enough.
SellUe is a Teardown & Consignment (T&C) Project Management company with a dedicated T&C digital platform called OPTIC. For a demo of this live asset, visit www.sellue.com, email [email protected] or call +353 831 456617.