Airbus and Boeing set to expand in parts and repairs
Major aircraft manufacturers Airbus and Boeing, having built their global success on transcontinental airliners, are now eyeing the lucrative if less glamorous parts and repairs side of the aviation sector.
While booming demand for air travel has caused the world’s top aircraft makers to ramp up production, it is the multibilliondollar 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 US 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 such as Germany’s Lufthansa Technik and the 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.
“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,” he said.
Boeing predicts that the value of the about 41,000 aircraft that will be delivered worldwide over the next 20 years will be about $6-trillion, while the demand for services to support this fleet will be worth about $8.5-trillion.
In Singapore, Airbus subsidiary Satair Group has an 11,000m² warehouse to house spare parts, which are arranged on towering shelves. They can be dispatched from the warehouse — Airbus’s biggest such facility in Asia and the secondbiggest in the world — within four hours of receiving an order, with plans to further slash the waiting time.
Airbus, whose revenues from services hit $3.2bn in 2017, 18% higher than the previous year, plans to expand the facility by 8,000m² in 2019.
Both Airbus and Boeing also have major pilot training centres in Singapore.
The fierce rivals play up their intimate knowledge of the aircraft they produce as an advantage in providing after-sales support over others that could provide the services, including the airlines themselves.
“We know best our aircraft because we have designed it,” Airbus head of services Laurent Martinez said. “We have all the capabilities to support the airlines’ operations and to have the competitive edge in terms of spare parts.”
Randy Tinseth, vice-president of marketing at Boeing Commercial Airplanes, said the firm only had a 7% market share in the sector and there was much room for growth.
THEY CAN BE DISPATCHED FROM THE WAREHOUSE WITHIN FOUR HOURS OF RECEIVING AN ORDER