December 17, 2012
Credit: International Aircraft Associates
A pair of developments is working in parallel to reshape the way the industry stocks, prices and sells commercial aircraft parts. Even as parts stocks for newer aircraft and powerplants become leaner, those same airframes are being parted out at an increasing rate. The confluence of these elements presents opportunities to save money, while continuing to maintain decent dispatch reliability.
“There's a huge transition going on in the de-stocking” of parts for Airbus A320s, Boeing 737NGs and 747-400s says Carl Glover, vice president of sales for AAR's European, Middle East and Africa supply chain operations. At the same time, parting-out has migrated from 737 classics, to older A320s, to 737-700s and, most recently, to A321s and A318s.
Both of these phenomena are impacting parts inventories that airlines carry to support these newer aircraft, making already sparse stocks even leaner and reducing the prices paid for those parts. As parting-out moves up the food chain, leaping from classic 737s and Airbuses to NGs and A321s, the industry is asking whether the phenomenon is a trend or an aberration—and just what the implications are for leaner shelves and lower parts costs.
Glover says airline shelves harbor 20% less inventory than before, and that one-fifth drop encompasses spares dedicated to newer types. He says a common practice for older aircraft has historically been to employ inventory to “displace or defer costly maintenance repair on components and engines and major [line replaceable units].” Now, that best practice has migrated to the A320 classics, 737-700s, A321s and even younger A318s. As those types are disassembled and parted out, inventories rise. Then operators use that inventory “more voraciously” in order to “reduce their direct maintenance costs.”
Such is the nexus connecting lean shelves, parting-out and lower costs.
Link those elements with equally voracious efforts at airlines to pare seat capacity and the net result is decreased spending on original equipment manufacturers' parts and components, says Glover. Instead of buying from the OEMs, he says carriers “are going out to the surplus market, or they're just consuming their own inventory better and running a leaner operation.”
An integral part of that surplus market consists of companies such as International Aircraft Associates (IAA), a major engine parts distributor. President Mitch Weinberg says carriers and engine shops are increasingly looking for parts for newer powerplants, like the CFM56-7B, “because they don't want to have [inventory] on the shelf.” They want either to dispose of components on the aftermarket, or more efficiently consume that inventory themselves. What they don't want to do is own it.