Air Transport

Independent aircraft parts distributors have managed to be a thorn in the side of the original equipment manufacturers’ (OEM) own logistics operations by being cheaper and nimbler, often able to get the right part to an operator in distress quicker than the manufacturer.

But with the OEMs now becoming more efficient, the independents have had to step up their own game, offering airlines the opportunity, for instance, to effectively outsource their parts operation entirely. “The emphasis has shifted from airlines being responsible for the risk of procuring spare parts, to companies like AJ Walter [AJW] taking on the responsibility,” says Christopher Whiteside, director of the UK-based company.

Leasing packages – where an airline can stock a distributor’s distress parts without having to add them to the balance sheet – are also growing in popularity, according to Avtrade, which is based near Worthing in the UK. The company expects the value of the stock it has leased out to customers to grow to $95 million in 2005, from $60 million in 2004. AJW’s leasing and power-by-the-hour business – where airlines pay a flat support cost – has grown tenfold since 2001, with $100 million worth of parts on lease with between 40 and 50 airlines, and 84 aircraft on power-by-the-hour contracts. Whiteside says leasing services appeal to customers because most OEMs do not offer them.

The cost savings offered by power-by-the-hour contracts make them a popular choice in the leaner times since 9/11, and Marshall Aerospares – a part of Cambridge-based Marshall Aerospace that operates mainly in the military sector – is also hoping to increase its power-by-the-hour business. General manager Nigel Heath says the predictability and stability of power-by-the-hour contracts make them especially attractive. “We are hoping to grow power-by-the-hour to be the majority of our military business over the next two years. To that end we’re investing in greater numbers of rotable stock for the C130.”

Another UK independent parts specialist, Saywell, based in Worthing, West Sussex, says there has been a sea-change in airlines’ attitudes to holding parts stock in the past four years. “Since 9/11, none of the airlines keeps any inventory on the shelf. The onus has moved to us as distributors to be the holders of the inventory,” says managing director Peter Saywell.