Aircraft ground support equipment is designed to last for years. Many years of hard use, years of unrelenting physical conditions, years of abuse at the hands of inexperienced operators. GSE is designed to withstand years of abuse, but it does eventually require updating. The question is whether you should purchase a replacement or should you lease? This question is not a one-size-fits-all question: it depends entirely on the scope of your operation, your finances, and the scope of your needs. We will dissect the ins and outs of purchasing GSE and help you determine if it is right for you.
What are the Reasons to Update Equipment?
GSE will last many years, but it is not limitless. At some point, you will have to figure out how and when to replace it, but why? Unfortunately, there are too many variables to explore thoroughly why an operation needs to update its GSE.
Knowing that all operations are very different, we can better understand why GSE would be updated and need to be updated.
An FBO housing corporate jets in the main hangar will have different GSE needs over an airline hub terminal at a major airport, with additional requirements over a central maintenance facility.
Airline Terminals
Probably the most challenging environment for GSE is airline terminals. Specifically, this is aimed at aircraft tugs. Airline terminals are bustling places: on average, over ten million flights annually in the U.S. alone, which amounts to nearly 28,000 flights per day. Without getting into the nitty-gritty, only a handful of hubs handle the bulk of these flights every day. Airliners' turnaround times generally vary from less than an hour to less than two hours, so aircraft tugs are used a lot.
These tugs are often used down the line at the terminal, so they may remain running all day, most days. However, units used in these operations will undoubtedly wear out quite a bit faster than those being used.
Corporate Hangars
Corporate hangars are a completely different animal than an airport terminal hub. Corporate jets are generally used in a much different manner than line jets for the airlines, which are run nonstop until the airframe times out.
Corporate jets are scheduled much more on an as-requested basis, and they are stored at non-hub airports, often referred to as industrial or executive airports. These are usually located adjacent to large cities that have a hub airport. The executive airport is precisely that: it is an airport that caters to corporate and private jets to afford executive travelers a faster service with far less competition getting in and out of the airspace, as well as less congestion on the ground.
The GSE used in support of corporate jets at these locations is usually housed and maintained in a large bay hangar, typically with a mix of other, unlike aircraft. The goal of the FBO is to cram as many jets and planes in there as possible to maximize the use of space (and profits). As a result, their GSE is much less likely to wear out from use but more likely to require replacement due to obsolescence.
This type of parking aircraft is particularly cumbersome if using a traditional tug and towbar setup; these units require considerable space to execute their turns and are primarily inefficient by design. Consequently, they are best suited for prolonged, open areas and poorly suited for confined areas. A remote control tug is a vastly superior solution.
MRO Centers
An MRO center uses a highly diverse and technical array of GSE, far beyond the requirements of an airline terminal. As a result, MROs require many GSE items, both powered and unpowered, which are not necessarily used uniformly. For instance, an A/C power unit may be run for many hours on end while an aircraft tug is only operated for a short duration to move aircraft in and out.
A lot of the GSE at an MRO facility is specialized equipment (air conditioning units, hydraulic test stands, air start carts). This equipment is expensive, very technical, and some of it is airframe specific.
The more generic GSE items, namely aircraft tugs, will receive use on a basis similar to that of a corporate operation.
Are There Any Other Options?
Considering the high price of acquisition of GSE, especially considering the lack of frequency that they may be used, some operators may wish to pursue other options besides new equipment. This is a perfect position to pursue because GSE is designed to be used for many years.
There are few options available on the market for purchasing either straight used equipment or refurbished equipment that has been thoroughly gone through, cleaned and degreased, and generally repainted.
Again, this is an excellent option for operations where the demand is not constant. For example, a non-line MRO that only routinely needs to run hydraulic systems, or an FBO that needs to have a power unit or air cart on standby for non-routine aircraft (i.e., transient military aircraft and large charter aircraft), which are items that are necessary to keep on hand and operational, but they are costly to purchase new for "just in case" scenarios.
Who Should Buy?
There are some situations where a purchase is a better option than leasing. For one thing, when it does come time to update or upgrade GSE, purchased equipment afford the owner/operator an asset that can be leveraged in the future for sale. In addition, aircraft GSE, a specialized asset, will resell for a reasonable price, assuming they were not abused.
So, purchasing a new GSE is a good option for operators who will put a lot of hours into their equipment where breaking the lease is possible. In addition, airlines are apparent candidates for owning their fleets due to the nature of the work.
Beyond the airlines, though, the equation becomes more nuanced. The decision to purchase vice lease brings about more questions: is there a reason to buy if your operation does not have the high ops tempo of an airline? Yes, there are reasons.
The impetus to purchase new equipment is not based strictly based on high use. Another viable reason to consider purchasing new equipment is the desire or need to update or modernize your fleet. Advances in technology are significantly improving the overall efficiency and usability of GSE, so you may find that purchasing makes a lot of sense to update your equipment.
A remote control aircraft tug makes a lot of sense to purchase because it will bring years of reliable service to your organization and will pay for itself in terms of fuel consumption being erased and workforce loads being reduced.
Also, remote control tugs are available in a wide range of options, providing a highly versatile platform that can do far more than the outdated diesel tractor tug can keep up with.
These units are highly sought after and will hold their value well, providing you a long-term asset, although you may never want to part with it in the first place!
Who Should Lease?
Sometimes leasing a house is more manageable than buying one. It usually includes provisions that make life a little easier, like maintenance, exclusive parking, community recreation, etc. But, of course, you don't own anything and have no equity. Leasing equipment affords users a similar option: if your operation would prefer to have the assurance that certain parts of the service are taken care of, it may be a better option.
This is not trivial, either. If you purchase used equipment, you are probably getting it with little to no warranty, which is a risky proposition for sure. If you do not have an in-house shop that works on your own GSE, outsourcing the work will quickly get very expensive. Also, if your equipment breaks and you cannot afford redundancy, you will be in a tight spot. A lease will afford you a new piece of equipment that is easily swapped out for another new piece of equipment at fixed durations, along with the peace of mind that the item will be replaced if it goes to the shop for repairs by the leaser.
Leasing is probably the best option for an operation that requires reliable equipment. They do not want to pay for the overhead of an in-house shop or save a retainer for heavy maintenance on their equipment. They need it to be turn-key, ready to work and have a built-in backup.
Conclusion
There are many good reasons to purchase new equipment and plenty of reasons to consider a lease instead. Every operation is different and needs to consider their own needs. Buying used equipment can be a good option, but there is always the risk that it will require maintenance, and there is far less assurance that you will have a reliable unit right out of the gate. New equipment is an investment and provides a resale opportunity, but you need to ensure that your users can offset the initial purchase price. Leasing is always an option, but it has limitations. Purchasing new is the best option for updating and upgrading equipment you intend to keep for the long term and modernizing your GSE experience, namely remote-control aircraft tugs. If you are ready to update your fleet with modern GSE technology, reach out to us, and we will gladly help you update your fleet with our sleek, current, and reliable tugs!
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