Component specialist AJW plans Latin American beachhead

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UK component support specialist AJ Walter Aviation is preparing a partnership with a Brazilian maintenance provider to gain a foothold in Latin America's buoyant MRO market.

AJW has a distribution centre in Miami, and last year raised its North American profile massively by acquiring the component repair shop of former Canadian MRO provider Aveos Fleet Performance in Montreal. But the aftermarket company - which is headquartered on London's outskirts near Gatwick airport - has thus far not been able to drum up significant business in Central and South America.

Now, however, it is in "reasonably advanced discussions" to cooperate with a Brazilian maintenance provider, says James Hardman, vice-president customer services for Latin America. The aim is to position a stock pool in São Paulo to support AJW's partner, benefit from the latter's local facility network and serve third-party customers.

Hardman declines to specify when the cooperation can be finalised, but says that São Paulo would be a "good hub" to support clients throughout the region, despite Brazil's complex customs regulations, which can make shipping material in and out of the country a complicated and time-consuming matter.

A bilateral air transport agreement between Canada and Brazil, sealed in 2011, should simplify the transfer of equipment between the São Paulo base and Montreal repair shop and provide access to a broader base in Brazil, he says.

Aside from locating component stock in São Paulo, AJW wants to grow its customer service team for Latin America and potentially set up its own office in the city. Contracts have thus far been handled through the Miami centre and local agents in South America. But Hardman says it is difficult to serve a region remotely from the UK headquarter as the business is largely driven by close relationships between suppliers and purchasers.

AJW's Latin American business has thus far generated just a "single-digit" percentage share in its total turnover of "just over $400 million" in 2012, says Hardman. But the region is to play a much more central role in future as the company aims counterbalance its traditional markets in Europe and the CIS countries. The aim is to reach sales worth $1 billion by 2017.

New technical capabilities will likely be necessary to achieve that goal. Given that South America's fleet expansion is largely driven by narrowbodies, AJW is well positioned with its current focus on components for Airbus and Boeing models. But Hardman says that the aftermarket firm is "exploring" the possibility of supporting Embraer 170/190 regional jets, as the type finds growing employment in the region.

He adds that AJW is "talking to one or two potential partners" to develop the respective capabilities over the next few years.