One of the people that co-founded the company is an attorney within the airline sector. He realized that the issue of end-of-life would rise within the sector. The first generation of mass-produced airplanes is coming to the end of their life cycles. So Koen was asked to help develop a business model.

The founders themselves generated a part of the financing. But they also got some grants from the government.

The service Aeronextlife offers is to disassemble planes while making sure the process stays eco-friendly. After disassembling the planes, the resources that were extracted are sent back into the supply chain. Al this is done with an extra attention to keeping the quality levels of the resources they extract the same.

Coming soon.

Vision

The vision of this company is to tackle the end-of-life issue that is currently arising, in a green, ecological manner.

Values

Ecology & technique

Business Model

There are a lot of companies that disassemble planes or have other activities that involve older planes. But there aren’t any that do the whole process and use a one-stop-shop principle like Aeronextlife does. 

The process of the disassembling activity is the following. The first step is fleet management. The assessment of the fleet is the start of the process. In this process it is decided which planes need to be disassembled. Eventually that plane is brought to Oostende, and the parts that are still airworthy are extracted from the plane. After this initial step they look for a destination for the remaining parts. For example, the aluminum from the hull of a Boeing 747 is compartmented. The people at Aeronextlife know exactly which alloys are present and where they are located. Those alloys are extracted and then used as raw materials.

If you look at the market of end-of-life planes you’re mostly going to find brokers that buy planes at a low price and sell the parts they can sell. Secondly you have other companies that take several parts out of the planes and the remains of the plane aren’t used.

While at Aeronextlife they try to extract as much materials as possible while maintaining a certain quality that you won’t find in other companies within the sector.

Also, most of the companies within the sector only do one or several steps of the disassembling process. At Aeronextlife they do the process from A to Z.

The revenue is generated by the amount of hours spent to disassemble a plane. It’s a classic cost-plus pricing method that they use at Aeronextlife.

They have a partnership with Sabena Aerospace, they also work together with Lufthansa Techniks and have good contacts with Fokker Technologies. This means they’re very well supported for the technological aspect of their operations. They’ve also attracted employees that are well connected and open doors for new partnerships. So establishing a great network has helped them a lot and will surely help them in the future.

Being an ex-banker, Koen Staut started thinking about a worst-case scenario 3 years ago before even starting this company. He realized that even if this scenario would become reality, the company would still be profitable.

The concept of recycling plane materials while maintaining the same quality is a new concept. So when they started with this company and branded themselves Aeronextlife, it didn’t take long get known within the sector. They are thinking about changing the name because Aeronextlife can be interpreted in different ways.

Because they are still in the first phase of their enterprise, they have not yet actively promoted Aeronextlife. But if they would start promoting their concept they would mainly do it with press releases and trade fairs. The reason why is because they are operating in a specific niche.

Growth

According to Mr. Staut Aeronextlife can’t protect their intellectual property. This means that they are obligated to grow fast. If they fail to do so they will lose the market to copycats. Momentarily they are planning to open a second site abroad and even a third one.

Customers

They are mostly focused on plane owners. And the Boeing 737 is their main target because of the large target audience. Aeronextlife is currently dismantling/recycling 25 planes a year, which is only a fraction of the potential market.

Most people in the sector don’t understand what Aeronextlife is doing. Traditional companies demolish planes that are ready for the scrapyard, planes that are just stranded and haven’t been used for some time. The results they get are mostly very low quality materials. For example, aluminum that is used for soda cans like Coca-Cola. Aeronextlife operates on a whole other market, the planes that they dismantle today are still capable of flying. 

Competitors

Aeronextlife is the first company of its kind so they do not have any direct competition at the moment. They do however have indirect competition. End-of-life companies and maintenance companies are their main competitors.

Conclusion

Aeronextlife does have one main weakness. The fact that they can’t protect their intellectual property makes them vulnerable for copycats.  The biggest opportunity is that the European legislation is changing and laws will be made demanding a lower ecological footprint of planes. This will create a higher demand for businesses like Aeronextlife.

One of the things that Koen has learned during this startup is that some companies need to mature before they become viable. They didn’t start the company after coming up with the idea of dismantling planes. The first 3 years before even setting up a legal entity they did research. That research helped them confirm some aspects of their vision and adjust other aspects.

The main advice Mr. Staut has for starters and entrepreneurs is to stick to the plan. Don’t lose sight of your goals and targets and only change the plan when necessary.

The main obstacles for Aeronextlife were getting partnerships, but also the disturbing factors that only wanted a slice of the pie and didn’t really contribute to the company. Mr. Staut managed to eliminate the disturbing factors and keep hold of the positive factors.

In the next 5 years Aeronextlife would like to have 5 settlements in Europe, and double shifts on each site. That means 50 planes dismantled on each site, each year.

Posted on 18/04/2016