Like most concerned, part distributors have suffered like the rest of the aviation industry from the virus crisis.
But bad times can bring opportunities as well as challenges, and some component specialists have used the crisis to acquire substantial inventories at a very affordable price. Others are using innovative sales tools to move stocks in difficult times.
An example of the first approach is U.S.-based Avair, which over the past 12 months, has acquired $250 million in parts stocks through a handful of transactions, says Avair's EVP sales Brandon Wesson. The most recent buy was of an Airbus A320 rotable pool purchased from HAECO ITM. This transaction alone added over 2,000 rotable components, including internal drive generators, starters and avionics components.
And these parts are ready to go. “They are all repaired and ready to install,” Wesson stresses. “Lots of component buys are from teardowns, you have to choose which to repair.”
Meanwhile, the teardown market has been slow. “Everyone expected an exotic rush to teardowns,” Wesson recalls. “Instead, owners are waiting it out.”
Avair bought a Boeing 737NG for teardown by eCube Solutions and expected a delay of several weeks before work begun. Instead, eCube was free to start right away. Wesson acknowledges that 2020 part sales were a “rollercoaster.”
Nevertheless, “since October we have been climbing back towards where we were before. Still we’re not out of the woods yet.”
Sales have been stronger on the A320 family and 737NGs, and cargo and defense sales have helped. Used parts generally sell for about half of new part prices, although “fire sales are cheap when an operator wants to sell to another broker.”
Airlines that want cash quick will sell parts outright, others willing to wait will sell on consignment, hoping for better prices even if sales are slower.
Wesson is not seeing any sign of airline restocking yet and is not sure it is coming soon. “I don’t know there will be a huge influx of restocking.” Even after the cash crunch is over, he predict carriers will look for more creative inventory solutions that do not require so much investment upfront.
The other approach to hard times is innovative part selling. Last October, AJW launched an online outlet store, with part prices marked down as much as 50% off pre-crisis values.
AJW head of digital trade Craig Skilton says results have been positive, considering the distressed market. “We didn’t know how much engagement to expect with such a new concept, but website visits are consistent, the team on live chat are talking to customers day in day out, and we’ve seen the value of orders grow each week.”
The discounts are available for almost all active Boeing and Airbus fleets and some Embraer components. Skilton says customers have been searching and ordering from a wide range of these items. In December, AJW added around 5,000 lines of consumables and expendables, and these have proved popular.
Regionally, most activity is from the UK & U.S. “However, in recent weeks we’ve had orders shipping across Europe, Asia & Middle East, which is a promising sign,” Skilton says “The free shipping that comes with any order is definitely being utilized and saving customers money.”
Most sales so far appear to be to meet immediate demands, not restocking. But Skilton has observed small bursts of procurement activity that gives him hope for the near future.
“We’ve certainly seen an uplift in people wanting to explore AJW Technique’s piece part inventory, which led us to advertising a gateway to this on the outlet store. We’ve seen a very encouraging number of downloads and enquiries as a result.”
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