AIRBUS, BOEING EXPAND AFTER-SALES SERVICES
SINGAPORE: Airbus and Boeing may have built their global success on the back of the transcontinental airliners but they are now eyeing a lucrative if rather less glamorous side of the aviation sector in their battle to dominate the skies — parts and repairs.
While booming demand for air travel across has seen the world’s top planemakers ramp up production, it is the multi-billiondollar after-sales service market that is taking an increasing amount of their attention.
The aircraft titans are aggressively expanding their presence in the sector, which is dominated by maintenance, repair and overhaul of aircraft but also covers other services, from training to parts supply.
The European and American firms have long done some business in after-sales support, but they are now moving to win greater market share and take on other players like Germany’s Lufthansa Technik and US-based AAR.
“The services market is more lucrative than actual aircraft sales because it has more potential and it covers many different spectrums,” said Shukor Yusof, an analyst with aviation research firm Endau Analytics in Malaysia.
“Boeing and Airbus... they have to be part of it. When you sell an aircraft, it’s in your interest to have a full package of after-market services.”
Boeing predicts that the value of about 41,000 planes that will be delivered worldwide over the next 20 years will be around US$6 trillion (RM23 trillion) — while the demand for services to support this fleet will be worth around US$8.5 trillion.
In Singapore, Airbus’s whollyowned subsidiary Satair Group has an 11,000-sq-m warehouse to house spare parts.
They are arranged on towering shelves in brown, yellow and orange boxes, and range from a main landing gear for an A380, the world’s biggest passenger plane, worth hundreds of thousands of dollars, to a washer worth one cent.
They can be dispatched from the warehouse — Airbus’s biggest such facility in Asia, and second-biggest in the world — within four hours of receiving an order, with plans to further slash the waiting time.
Airbus, whose revenues from services hit US$3.2 billion last year, 18 per cent higher than the previous year, plans to expand the facility by 8,000 sq m next year.
Both Airbus and Boeing also have major pilot training centres in Singapore.
Randy Tinseth, vice president of marketing at Boeing Commercial Airplanes, said the US firm currently only has a seven per cent market share in the sector, and there was plenty of room for growth.
“The products we have today can only address about 30 per cent of this market,” he said at the recent Singapore Airshow.
“So if this market grows about five per cent per year as we focus more on developing new products, we expect to see dramatic growth in our business.”