“As an OEM we look at the product as a whole and not just as a collection of individual parts. We design our engines as an entire system,” Wayne Russell, manager of parts support for Pratt & Whitney Canada, told AIN. Russell said some engine parts have a high enough turnover rate that it becomes economically attractive for some companies to produce them for aftermarket installation.
Supply chain management
The Russians are coming, the Russians are coming! The movie title of 41 years ago seems fitting to describe at least the perception of what is contributing to the current uptick in the large-cabin segment of the used aircraft market. Tales of aircraft selling to Russians at extraordinarily high prices have begun to capture the attention of the market.
Brazilian airframer Embraer has selected Menlo’s Singapore Logistics Centre as regional hub for service parts warehousing and fulfillment in Asia. The company will operate a regional logistics hub providing dedicated service parts warehousing and distribution to support the expansion of Embraer’s line of regional and business jets in the Asia-Pacific market.
Since the pre-owned market began to back off from its massive inventory figure nearly a year-and-a-half ago, much focus has been given to the movers, which for the most part have been just about every late-model current-production aircraft. In contrast, several model types have yet to experience much reduction in inventory. In fact, some are bucking the overall trend, highlighting the dichotomy among model types.
When Paul Fulchino became Aviall’s chairman, president and CEO in December 1999, annual sales for the 70-year-old Dallas parts distributor were growing at a predictable and respectable rate. Back then, end-of-year sales totaled $371.9 million, with net earnings of $9.7 million.
Resembling a turbine engine, the pre-owned market in the first quarter of last year sucked wind. What a difference a year makes. All of a sudden everyone needs a corporate jet, demand that is pushing inventory levels of pre-owned stock lower and delivery dates of many new aircraft out farther. There are about 50 fewer aircraft available today than there were this time last year.
Buyers continued to roll up their sleeves and involve themselves with the used aircraft market, driving down further what has been for the last few years a vast supply inventory. The 10-percent depletion in used aircraft inventory over the last 13 months has taken a step toward assuaging the doubts of many left shell-shocked by nearly three years of market malaise.
Aviall Services (Booth No. 1437), a provider of aftermarket parts and services, reports that its Logistics and Inventory Flight Team (LIFT) program launched last fall is proving popular with customers. The goal of the LIFT program, which provides custom inventory and logistics solutions to individual helicopter operators, is to help those operators lower direct operating costs based on their individual needs.
Since diversifying into a sales dealership last year, HelicopterBuyer (Booth No. 2056) has found a new customer base that prefers to deal with a rotorcraft’s owner rather than a succession of sales brokers. President Mark Clancy said that buying aircraft into inventory pays off for both parties.
The momentum that began to build in the used jet market late last summer is rolling into this year. Overall inventory is about where it was a year ago, but after a significant month-over-month build-up through July, sales activity heightened and just as quickly reversed direction. Between August and the middle of last month, roughly 100 more aircraft departed the market than arrived.