Generally, the perception has been that the global commercial aircraft spares market has been in decline since 9/11, due to a combination of an immediate decline in air travel followed by an over-supply of new aircraft. First, the global airline recession could be far deeper than first thought. Airbus achieved a number of sales successes at the start of 2002—notably the sale of 41 new aircraft to South African Airways, traditionally a Boeing customer. It was well placed to meet its 2002 delivery target of 300 aircraft, as it already had 320 firm orders for the year.
But since September 11, 945 commercial jets were retired, according to U.K. aircraft valuation company Airclaims. While there were 1,200 jets in storage before September 11, the number after became 2,400. Boeing predicted its deliveries would fall to 380 in 2002—but that still meant 600 new aircraft were delivered in this year into an extraordinarily depressed market.
There were two immediate consequences of such immense overcapacity: a rapid fall in aircraft prices—and thus revenues to manufacturers—and a massive recession in the spares market. Add to this the advances in computing during the previuos decade and you have a new world order...featuring the Aeroxchange portal! By year 2000, 33 airlines had got together to co-operate in e-commerce and e-procurement, eliminating competition between themselves pushing the price up, in favour of co-operation and cutting out the middle man.
Commercial airlines, whether they are a traditional network airline or a low-cost, point-to-point service provider, increasingly realise that they are not the best owners of aircraft rotables and spares or of the massive infrastructures that are needed to service modern aircraft, aero engines and aircraft components. Specialised companies investing in aircraft and engines and offering lease arrangements to airlines have successfully established themselves, thus making aircraft spares leasing and aero engine leasing, instead of outright purchase, the norm in the industry.
Outsourcing maintenance and spares is based on ideas of specialisation and core competencies. It seems to open the way to reduced costs and increased efficiencies. However, outsourcing may not necessarily make economical sense or even be possible for the full scope of work; it depends on the individual situation of the airline and time of decision-making.
The role of effective stocking of spares: This entails not only stocking sufficient quantity of spares but also having an effective of tracking and locating the same from warehouses when required. Lack of tracking ability may compel an airline to take shortcuts in maintenance practices to avoid large downtimes and associated losses. Furthermore, owing to the expensive nature of the aviation spares, the possibility of fraud is high.
So Virgin Atlantic is planning to introduce RFID tagging (computerised tags) to track airplane inventory following a four-month trial of the technology . According to senior systems analyst Graham Holford, "Virgin Atlantic is keen to investigate the efficiency of the RFID-enabled warehouse."
Advantages of tracking spares: The intention is to find efficient means of not only tracking parts but also making them available in the quickest possible time. At present the airline is experimenting with using RFID to track high-value aircraft parts at its logistics center at Heathrow.
It is expected that RFID technology will help track and locate aviation spare parts faster, thereby resulting in faster repair of aircraft. It is also expected that RFID tracking could help cut fraud. In times to come other airlines may adopt this strategy of efficient warehousing and logistics support.
In conclusion, once the parting out market is on the rise again, brokers will have increasing costs, while competing with the OEMs who have now entered the market themselves driving towards increased efficiency. Here's an example where, paradoxically, competition is beneficial to the end user, the operator, because it results in the best possible price.
The FAA posts bulletins on the web regarding SUPs (suspected unapproved parts) military aircraft spares and civil.