Air travel demand has been experiencing a sharp increase in recent years, intensifying competition among players in the global aviation market. For airlines and aircraft-leasing companies that are going head-to-head with their respective rivals, the key to success lies in maintaining high levels of aircraft operational availability while ensuring safety, their absolute top priority.
In an effort to help address this challenge and support the aviation industry’s growth—while making this growth beneficial for itself as well—Marubeni has built its own aircraft aftermarket platform, which has been steadily expanding. In this platform, Magellan Aviation Group LLLP (Magellan) plays a central role, leveraging more than 25 years of experience in selling reusable airframe and engine parts (known within the industry as USM, “used serviceable materials”) that are procured from retired aircraft as well as in leasing secondhand engines. Marubeni initially invested in Magellan in 2012, later transforming it into a wholly owned subsidiary.
Magellan has two operating bases, both of which maintain large warehouses; one is situated in Charlotte, North Carolina, the United States, and the other in Shannon, located on the west coast of Ireland. The company’s Singapore office, which focuses on sales, is a new addition. Magellan has more than 800 customers in about 100 countries, primarily serving airlines and MROs. MRO stands for maintenance, repair, and overhaul, and MROs are specialists whose operations are approved by aviation authorities. Aircraft must undergo various levels of maintenance. In the case of engines, for example, specific types of maintenance are required based on flight hours as well as the number of takeoff and landing cycles. The purchasing of parts represents most of the overall cost in these maintenance operations; however, airlines can cut such expenses without sacrificing safety by choosing high-quality secondhand parts over brand-new ones that they would otherwise buy from manufacturers.
Magellan’s broad selection of parts includes very small components, like screws, as well as large items such as landing gear and engine blades. At Magellan, the product procurement process starts with acquiring an asset: a retired aircraft. In most cases, acquisition is made possible by winning a competitive bid, which means that pricing excellence is the defining factor that affects the company’s revenue. The internal condition of purchased engines, which have been used for hundreds of thousands of flight hours since their debut, varies. But disassembling an engine and running a health check before the bidding is never possible. Bidders must make a judgement solely based on the information made available by the seller, such as maintenance records. When it comes to placing a bid, Magellan estimates the market value of the particular parts that are to be recycled from a prospective asset—the retired aircraft—by fully employing its deep knowledge of engines as well as its expert judgment, which are backed by many years of experience, as well as its own data aggregated from various internal reports, including sales records.
Following a successful bid, Magellan entrusts respective third-party specialists with teardowns of the airframe and the engine, from which the company carefully selects recyclable parts. The amount of useable components varies depending on aircraft type, but in the case of a narrow-body aircraft (a single-aisle passenger plane)—which is Magellan’s primary target—the airframe and the engine each yield only about 1,000 reusable parts out of the hundreds of thousands of components that are used to manufacture just one aircraft. Among these reusable parts, which have already been cherry-picked, only high-demand items go to either of Magellan’s two warehouses. From the warehouses, the parts are then sent to MROs or repair shops for the necessary maintenance or overhaul corresponding to customers’ needs. Finally, the refurbished parts are shipped, perfectly ready for installment into an aircraft.
“We have a dedicated quality-control department both in Ireland and North America, and they work closely together. So, when a customer orders a part from us, they know that they are getting a quality part. They can rely on the parts that they buy from us,” says Niall Duggan, Magellan’s managing director overseeing operations in Ireland. The quality-control teams thoroughly check the maintenance records provided by airlines so that they are fully aware of the present condition of the parts as well as how they have been used, never failing to detect wear and tear.
Over the last decade, Magellan has doubled in size, both in terms of revenue and headcount. In 2024, the company reported sales of about 250 million USD, the highest in its history. “This business is quite technical, but we have some really good people, and that has been the cornerstone of Magellan’s success,” says Donnacha Dowling, Magellan’s CFO. He explains that having the ability to swiftly complete asset acquisitions, a strength that has been highly acknowledged by partners in the industry, is another key driver for success. Dowling adds, “Backed with the capital that Marubeni provides, we are not limited in funding, so we can close on transactions very quickly.”
Currently, aircraft are being operated for longer lifespans due to a backlog in deliveries of newly manufactured planes caused by global supply-chain disruptions. While indicating a steady, incremental growth in demand for secondhand engines and other parts, this also means that retired aircraft, the source of these parts, are also becoming scarce. As a solution to this challenge, Magellan has incorporated a new business model: purchasing active aircraft with remaining leases attached. Although this means it takes a few years before the aircraft becomes available upon retirement, this scheme enables the company to secure future opportunities for teardown.
“It’s a very time-sensitive business,” says Richard O’Grady, VP of trading and asset management at Magellan. He joined the company 25 years ago, starting his career in the warehouse as a shipping clerk. O’Grady adds, “When airlines have aircraft on the ground, this is costing money, not making money. So, they come to rely on Magellan to be efficient, get the materials as quickly as possible, reducing their overcall cost.”
Getting high-quality materials in as little time as possible is also a high priority among aircraft-leasing companies, who bear responsibility for maintenance while their aircraft are in transition from one airline to another. Again, time is of the essence: the sooner the better. “We want to maintain the safety of the aircraft while retaining its value,” says Michael O’Hurley, Executive VP of Stratos, an independent aircraft investment specialist with a portfolio of 60 aircraft under management. “That is why we come to Magellan: getting good parts for a reasonable price.”
Marubeni, which has built up extensive knowledge and expertise in the aircraft aftermarket industry through years of experience with Magellan, invested in DASI, LLC, one of the world’s largest distributors of aircraft expendable parts, in 2023. Based in Florida, the United States, DASI buys unused aircraft parts that are left as surplus stock at airlines or MROs, selling them via its own online store. In the same year, Marubeni also established KarbonMRO Services Sdn Bhd (KarbonMRO) in Malaysia, venturing into the aircraft maintenance and teardown business.
“As a Group, we are committed to strengthening our platform and achieving sustainable growth by combining the functions of each one of our Group companies, which complement one another,” says Kento Jike, who is seconded from Marubeni and is currently serving as director of business planning at Magellan. Synergies among the companies are anticipated, as Magellan may acquire a retired aircraft leveraging its customer base in Singapore, followed by the teardown of that aircraft being undertaken by KarbonMRO, whereupon reuseable components will be identified and become marketable as secondhand parts, and these parts will finally be sold not only by Magellan, but also by DASI, leveraging the competitive edge of their sales network and online store.
Ever since the Wright brothers made the world’s first successful flight, the evolution of the aviation industry has historically revolved around the U.S. and Europe, but this is no longer the case; it is Asia that is driving the growth of the industry today. Southeast and South Asia are projected to see the world’s largest increase in aircraft operations due to increasingly rapid economic growth and already large populations. Accordingly, the size of the aircraft maintenance market in Asia, which is currently growing at 4.2 percent per year, is expected to reach 17 billion USD by 2035.
In the Asian market, which already lacks maintenance capacity because of excess demand, Marubeni established KarbonMRO, partnering with D’viation Solutions Sdn Bhd (D’viation), a Malaysian company that trains and dispatches aircraft maintenance engineers and technicians. As an independent MRO, KarbonMRO provides maintenance services to airlines and aircraft-leasing companies while undertaking teardowns of both the airframes and engines of retired aircraft for used-parts providers like Magellan.
KarbonMRO’s maintenance operations include heavy maintenance on airframes, where they perform extensive health checks and large-scale maintenance including in-depth inspections and repairs of the airframe’s internal structure. The company also offers flexible options for engines according to the customer needs, such as engine module replacement. Other examples of options provided include borescope inspections, storage and preservation services, and maintenance services intended to prevent corrosion and deterioration. Having the ability to perform maintenance both on airframes and engines at its own facilities, the company can provide its customers with services that are speedy and consistent, distinguishing itself from other MROs. In fact, KarbonMRO is the only MRO in Malaysia that can offer “one-stop service.”
“Our vision is to provide premium asset solutions throughout the Asian region, covering all phases of the aircraft’s lifecycle,” says Kevin Teoh, an aircraft engineer and the founder of D’viation, who is also serving as managing director at KarbonMRO. The company is one of the very few MROs in Asia that can perform both maintenance of operating aircraft and teardowns of retired aircraft at the same facility. According to Teoh, one goal for KarbonMRO is obtaining certifications from the aviation authorities of countries outside of Malaysia as well as increasing the number of aircraft types that they can work on. He adds, “There are a lot of airlines coming to launch new routes in Asia. We are looking at how we can make our services meet their requirements and demand.”
KarbonMRO is situated in the outskirts of Kuala Lumpur, a location which boasts easy access for other countries in Asia. Both their hangar and engine maintenance facility are kept clean and neatly organized at all times. “We want our facilities to look pristine. That is very important and helpful in many ways,” says Mahendra Kumar, an engine maintenance engineer who currently oversees both of KarbonMRO’s facilities. Embracing the notion of gemba kaizen (ongoing improvements on the front lines of operation), Kumar hosts a weekly meeting to discuss with his maintenance team what they can do to further improve the efficiency of their performance while ensuring safety. He adds, “We have clients walking in to see how their aircraft has been processed. When they see a good environment, they will be assured that their aircraft is in good hands, and that when the aircraft takes off, it will do well in the sky.”
KarbonMRO is a newly established company. Just like any other startup, everything began from scratch, including recruitment. After a year-plus-long endeavor of receiving aviation authority approval and completing construction to extend its hangar, KarbonMRO has recently carried out its very first heavy airframe maintenance project. “When the aircraft, which was maintained in the hangar that we built by the engineers that we had hired, took off, I felt a great sense of accomplishment,” says Hisanori Ujita, who has been involved in the KarbonMRO project since its preliminary phase and is currently based in Malaysia, seconded from Marubeni.
“Always putting safety first, we want to carve out a reputation for being the most trusted MRO,” Ujita says, affirming KarbonMRO’s commitment to success. He also explains that his own mission is to contribute to the enhancement of synergies among related Marubeni Group companies, adding, “We will continue to scale up our ecosystem, envisioning a future where Marubeni can leverage its entire value chain throughout Asia, from asset acquisitions to teardowns and selling products.”
Marubeni’s aircraft aftermarket business took off a little more than a decade ago. Aiming for even greater destinations, the company now continues its journey, securing clear visibility as it keeps flying around the globe.
(All information contained in this article is based on interviews conducted in September 2025.)
