When UK parts specialist AJ Walter acquired the component shop of defunct Canadian maintenance provider Aveos in 2012, the deal was "not purely about economics", stresses the company's president Christopher Whiteside. "It was about strategy."
He recalls: "Everybody told me it would take longer… It would cost more money… It would be more stressful. But no one told me the outlook wouldn't be top class."
For one thing, the acquisition provided AJW with a footprint in North America to grow its business in the region, Whiteside tells FlightGlobal. But more significantly, buying the repair shop in Montreal – subsequently named AJW Technique – gave the family-owned parts distributor status as an MRO provider. "I was much more interested in psychological warfare and contaminating my competitors' inventory," says Whiteside.
He says "many" MRO customers do not disclose that they are sourcing material from AJW. While it might be possible for maintenance providers to repackage certain material such that clients can not identify the distributor, repair certificates cannot be hidden in the components' documentation, he notes.
Today, AJW Technique conducts about 3,500 repairs a month, and staff numbers have grown to more than 260, from an initial 12. The shop's capabilities span about a quarter of AJW's parts catalogue. The objective is to increase that to half, with the other half being serviced through the manufacturer.
For a components supply deal with EasyJet, AJW has partnered with Thales and Zodiac to share repair of those two manufacturers' equipment. AJW is an authorised service centre for Thales equipment, notes Whiteside, who sees scope for similar deals under which AJW could serve as an integrator for component OEMs that, on their own, might not be able to secure deals with airlines if their equipment represents a small share of an aircraft's overall maintenance requirement.
"An airline wants to package up the supply chain in spare parts as much as they can," Whiteside argues.
However, despite AJW Technique's growth he says there is no intention to open component repair facilities at other locations. He does not rule out a potential venture into other activities such as composite repairs. But he confirms that the move into component repairs was partly driven by the opportunity of the Aveos shop's availability for purchase.
Winning the EasyJet contract in 2015 represented a fundamental change for AJW. While the distributor previously served mainly small or medium-sized airlines, it suddenly had to ensure spares supply for a major European carrier with an expanding fleet of about 240 aircraft operated from more than 30 bases across the continent.
Whiteside wryly remembers a nine-month preparation period required to progress "from the place being on fire to smouldering" before AJW took over the airline's parts supply during the winter 2015-2016 schedule. Swiss maintenance specialist SR Technics had previously provided the service to EasyJet.
"We were compelled to completely reorganise our business, because it was the only way we would be able to make the contract work," says Whiteside. Just three years earlier, in 2012, AJW had opened a new headquarters near London Gatwick to centralise office and warehouse activities previously located at different facilities. Today the site is nearly full, and earlier this year construction work started on an extension across the road.
Some 55% of about 19,000 parts that AJW handles at the UK facility each month are for EasyJet, says group operations director Andy Smith. AJW provides the carrier with consumables and expendables, and manages supply of rotable components. EasyJet owns rotable components for its fleet, but AJW is responsible for the equipment's storage, distribution to and from the airline's stations, and transfer to repair shops.
Whiteside estimates the EasyJet deal represents about 80% of AJW's parts distribution revenue worth some $570 million annually. He praises the company's staff for having risen to the challenge of accommodating the low-cost carrier, and argues that the change has been "in a strange way good" because "it does enable the business to learn and then develop and then to grow".
He adds: "We are now basically trying to roll out our experience from that [EasyJet deal] to the broader marketplace." He reveals that a deal has been won from a business jet manufacturer to handle its spare parts, and that AJW Technique's repair capabilities will be expanded accordingly.
When he opened the headquarters, Whiteside had a target of reaching $1 billion annual global business revenue by 2017. Today, AJW's group turnover – which includes component repairs and engine support activities, beyond the core material-supply business – stands at about $700 million, he says. But the $1 billion mark still serves as a goal, and Whiteside now believes it can be reached by 2022.
Source: Cirium Dashboard
