The last two years could be described as the time of forecasts and hopefully 2018 will go down as the year of decision when it comes to component repairs. The global commercial fleet is forecast to grow to 45,000 by 2035, meaning an additional 22,700 aircraft will need to be maintained and repaired, some 10,500 of them in the Asia-Pacific region alone. Michael Doran reports.
THE TIME HAS ARRIVED TO MOVE FROM FORECASTS TO DECISIONS, to confront the reality that the Asia-Pacific fleet will almost triple in size by 2035 and the option to have all these aircraft maintained offshore will not be available. As Tom de Geytere of AJW told AAV: “Today’s MRO capacity will not be able to service the growth in the next few years and with only around 20 percent of component repairs being done in the region, there must be growth in the facilities available to do the work.”
By definition, the markets for components, component MRO, parts and consumables are often intermingled, leading to a confusing picture of what is the dollar value of this segment is and who the key players are. In 2016, consultancy ICF estimated the global components market demand at US$14.9 billion and Asia-Pacific’s
share of that at around US$4.5 billion. De Geytere of AJW puts the global value at US$15 billion growing to US$22 billion in the next decade. Canaccord Genuity analyst Ken Herbert values the global commercial transport material market at US$30 billion with around US$12 billion of that classified as sold through the distribution market where he identifies Boeing’s Aviall and Airbus company Satair, controlling around 50 percent of the segment.
However, de Geytere told AAV there is an important distinction to be made between initial provisioning and ongoing component support. He said: “Airbus and Boeing have parts companies they use to provide the initial parts inventory to customers buying an airframe which is why these companies have large order numbers
but does not mean they do the aftermarket support as well. We have client airlines that have received components with the aircraft which we have purchased and provided the airline with a powerby- the-hour agreements.”
Whichever way their business model is defined, Aviall and Satair are major players in the industry and in markets where there is a preference for OEM manufactured parts, such as in China, they are in a strong position to capitalise on their unique positions. Both Boeing and Airbus have stated their intentions to grow their services revenues and are packaging power-by-the-hour agreements into aircraft sales taking control of where the needed components will come from. As to how they will exercise this market power remains to be seen as does the attitude of operators towards becoming over-reliant on a one-supplier situation.
To read the full article, please click here – AAV May 2018