Boosting Latin American aviation market calls for more effective supply chain solutions
With the Latin American countries to boost their economies above the world average rate, the region’s air traffic is no exception – according to Airbus, by 2030 it is expected to be subject to the forecasted 6% annual growth. Meanwhile, the region’s airline industry may face development-related obstacles since some local airlines nowadays are forced to wait up to a week while the necessary component is delivered. However, the ineffective supply chain issue is likely to be solved should the market players manage to successfully deal with the problems regarding the business process optimization. Modern Internet-based technologies could be the key towards making these problems a history.
Though the global industry experts predict that the Latin American airlines will bring multi-billion deals for the aircraft manufacturers in the future, currently the business profitability of the local airlines is one of the lowest, expected to amount to only $0,4 billion by the end of this year, according to IATA.
‘Aside from the other relatively solvable issues, the Latin American aviation industry is suffering from a cost-ineffective supply chain, which brings millions of dollars-worth additional expenses to local airlines. In Europe, where spare parts may be delivered within just 24-48 hours, a single aircraft-on-ground (AOG) situation may cost up to $50 000 in additional expenses for an airline. In the Latin American case the expenses are likely to be significantly higher, since an average spare parts delivery may take from 4 days to a whole week! In this case, airlines, especially those with smaller fleet, are faced with tremendous downtimes whilst having to wait for the necessary component to be delivered,’ commented the CEO of Locatory.com Zilvinas Sadauskas.
In order to optimize the costs and time of delivery, most of the Latin American market players purchase spare parts in Florida, the USA, which, due to its geographical proximity and a well-established aviation hub, allows for much better logistic solutions. However, the local supply market is being heavily penetrated by a substantial number of resellers who do not maintain personal stocks but perform the role of brokers thus naturally stretching out the purchase process.
‘Moreover, one should always consider the specifics of the local market. Some destinations have little or even no straight air connections with the North American suppliers. For example, the Surinam Airways, which is the only national carrier that operates scheduled flights to the USA, flies to Miami just a couple of times per week. In order to improve the supply chain in the region, the Latin American airlines and MROs should properly develop their interaction not only between each other, but also with other local aviation market players. Locatory.com is a customized global online aircraft parts & components marketplace designed to offer the best solutions under the aforementioned circumstances. It is practically irreplaceable for local airlines that are in need of prompt 24/7 supply solutions within a certain territory and cannot afford to wait for transcontinental deliveries. All the suppliers and their documentation are being constantly verified by our experts thus ensuring that our customers receive European Quality services and products,’ comments Zilvinas Sadauskas.