At the Singapore Airshow, AAR (Booth S01) is celebrating its 65th anniversary and promoting the independent supplier's parts-supply and component-repair services and support for original-equipment manufacturers (OEMs). The company serves commercial airlines, governments, and OEMs and employs more than 6,000 people in 20 countries. Each year AAR performs 5.7 million total MRO man-hours. AAR government-related activity—about 35 percent—is "longer-term, supply-chain management contracts where we’re the prime contractor," said AAR OEM Solutions commercial v-p and general manager Darren Spiegel.
AAR helped pioneer custom supply-chain solutions, ranging from individual components to integrated rotable and consumable inventory and repair-management programs. The company's inventories of engine and airframe parts contain more than one million items from over 250 manufacturers.
The supplier’s "Paarts Store" e-commerce platform allows customers to check inventory, order parts, and track shipments and has seen "significant engine-business growth," including whole-asset trading and leasing, turnkey parts solutions, and engine-build and technical support.
The OEM Solutions division links manufacturers to markets, a recent example being last year's agreement to distribute and maintain BASF Deoxo cabin-ozone and volatile-organic-compound converters, which filter ozone that may enter airliner cabins and can cause health issues.
Meanwhile, AAR Component Services provides rotable-component MRO for "virtually every commercial aircraft [model]," under supply-chain or dedicated offerings. Component-repair centers in Amsterdam and New York provide component repair, overhaul, and exchange and replacement options.
Asia-Pacific is a major focus for end-user customer and OEM business. "China is a big focus, and we have an office with seven salespeople [covering] the Chinese market, especially for new products on the distribution side, which has done fantastically during the past five years," said Spiegel.
AAR is expanding its presence in the region, having recently obtained Japan Civil Aviation Bureau approval to serve Japanese airlines. Last year, AAR signed a parts-supply deal with Mitsubishi Heavy Industries Aero Engines, to which it will supply parts for the Japanese company's airline-maintenance contracts, including Pratt & Whitney PW4000 turbofan engines.
Elsewhere in Asia-Pacific, AAR is establishing MRO joint-venture capacity in Nagpur, India, in 2020 to complement an existing landing-gear facility in Malaysia, although Spiegel acknowledges the challenge. It is, he said, "still a work in process and is our first project like this in India. Things have taken longer than our initial expectations, but the long-term market opportunity remains compelling. Initially, the facility will start with A320 work in two hangars."
Asia-Pacific provides a broad focus for AAR, which is seeing "good growth in Japan, and a fair amount of success in Australia and New Zealand," he said. "We don’t want to simply replace incumbent distributors, [but to] outperform them. We have more than 30 people in Asia."
AAR was selected by Chinese MRO Ameco to provide long-term customer support for Rolls-Royce RB211 engine repair, exchange, and leasing. "We’ve supplied mostly legacy engine parts [for the General Electric] CF6 and RB211, but an uptick in the cargo business [involves] a lot of [Boeing] 757s and 767s, so there is a big need for engine parts here. We [overhaul] our own engines, with Ameco putting them in the market through sales and exchanges. There is a shortage due to [lack of] MRO availability."
Spiegel said that the AAR Paarts Store business has grown because "buyers want ease, especially for repetitive purchases on routine, scheduled orders. Everything [we sell] is 'factory-new,' but in the near future we are looking to offer used-serviceable materials as well."
AAR OEM Solutions, "an extension of component OEMs," provides an analytical, detailed aftermarket focus that "differs from larger, catalog-style distribution models," he said, which provides opportunity and challenge. "Opportunity-wise, many OEMs are coming to us. The challenge is PMA [third-party FAA-approved parts manufacturer approval] development, where we have to show the quality of the OEM part," Spiegel said.
Talking about AAR component-repair services, Spiegel characterizes all manufacturer supply-chain solutions as bespoke: AAR provides "basic third-party logistics to stock and support OEMs through to exclusive arrangements where AAR is the OEM's face to the global market," he explained. "Some hire us for select regions, or for specific products where they see a competitive threat."
For example, AAR last year signed a deal with Hong Kong Aircraft Engineering (Haeco) to provide component repair for parts for its Inventory Technical Management group. AAR now has added component repair through the Amsterdam and New York facilities to a previously developed AAR parts-exchange pool in Hong Kong that provides Haeco with immediate access to parts and expands the Hong Kong company's reach in Asia-Pacific.
Alongside the BASF Deoxo distribution contract, AAR has an exclusive, multi-year global agreement with AeroControlex to stock and sell auxiliary power unit lubrication pumps and related components. “This is a meaningful growth opportunity for our business serving as a value-added extension of an OEM,” said Spiegel.
AAR OEM Solutions also provides exclusive piece-part distribution for promotion and sale of Woodward components in support of U.S. government fleets on multiple platforms, including T700, LM2500, and TF34 engines. Other product-support partnerships include exclusive distributorship and support for Eaton Aerospace fluid and electrical distribution, fuel, and motion-control products.
In addition, Spiegel said that GE Aviation subsidiary Unison Industries is a long-term partner, with AAR as the exclusive distributor and provider of AOG support. Another example is Zodiac Aerospace, for which it is preferred global distributor for water and waste product lines.