Paris Air Show

AFI and LHT call truce to work jointly on A380

 - December 15, 2006, 12:43 PM

Air France Industries (AFI) and Lufthansa Technik (LHT) are joining forces in Airbus A380 component support, the two companies announced at Paris Charles de Gaulle (CDG) Airport on Friday. The two arch rivals in the European maintenance, repair and overhaul (MRO) market have created a joint venture called Spairliners. They are targeting a 30-percent market share within three years.

Under the full component support scheme, an operator needing to replace a part will get a new one from a pool. The failed part will be repaired before going to the pool. AFI and LHT have shared repair skills to avoid duplication of capabilities.

The key to the joint venture is the economy of scale achieved through increasing the size of the fleet managed. “Even two typical A380 operators joining will not have that level of synergies,” August Henningsen, LHT’s chairman, said. Potential savings from enrolling into Spairliners’ full component support are close to the economy of scale that can be achieved with an 80-aircraft fleet. In addition, parts delivery time is said to be as low as one to 10 days, instead of six to 10 weeks for a standalone airline lacking the wanted component in its inventory. “Nobody knows how reliable new individual components will be,” Henningsen pointed out.

Spairliners will have its main operation at Paris CDG airport and its corporate headquarters in Hamburg, where Jean-Luc Fattelay will be CEO. Inventories will be set up at other locations at the regional level. Bruno Delile, AFI’s senior vice president of materials and services, said North America, Middle East and Asia Pacific will be served as well as Europe. “Monitoring of the supply chain will be critical,” he insisted.

Delile described the basic package available from Spairliners as guaranteed component availability, component repair services and logistics. The first add-on, called customer integration, also includes main-base support. The second, dubbed “worldwide support,” adds out-station support. These additional services aim to reduce the administrative effort required for component procurement.

The joint venture will initially operate with 15 to 20 employees. In the longer term, it is proposed to create or secure 100 jobs at each partner company. “The value of the inventory will quickly reach $50 millions,” Delile added.

Henningsen expressed hopes for having the first contract signed by year-end. “We’ll be ready for the A380 entry into service, whenever it is and whoever the airline,” Delile added. Spairliners and Airbus staff have started discussing how to fit large A380 components in the existing cargo fleet at Air France and Lufthansa.