Unprecedented e-commerce growth in aviation aftermarket sector for 2014

Oct 18th, 2011

The current aviation market and internet e-commerce growth synergy suggests that by 2014 40% of all MRO companies’ deals will be conducted online. Locatory.com experts estimate that by 2020 85% of customers will be dealing with suppliers without the actual human interaction whatsoever. Although hundreds of billions are spent on MRO business each year, most payments are still being processed on paper. According to Locatory.com, the nearest future sees MRO companies reducing its expenses and boosting profits up to 40% simply by realizing e-commerce opportunities.

"Imagine someone who is looking for a spare part at 2 a.m. under an AOG situation. One can access a website not only to find the part, but also confirm availability, place an order and track the shipment. Customer preferences are changing, so MRO companies need to cater for customer needs at all levels, especially those that are concerned with time and cost savings and global reach." – says the Locatory.com Chief Commercial Officer Vytautas Vorobjovas.

According to various sources of information, Locatory.com estimates, that while the average cost of processing a purchase order manually ranges from $75 to $200, automating procurement procedures reduces the cost to $10 - 40. Furthermore, the amount of sales on e-commerce since 2007 has doubled, and is projected to reach US$ billions 334.7 next year. According to this, in the nearest 5 years aircraft parts locators will be fully modified to meet all customer needs and the automatic authorisation with integrated payment systems will be installed on every aviation spare parts’ locator e-platform.

The IATA forecasts that aviation business is set to grow at a pace of 4.9% next year

“The IATA forecasts that aviation business is set to grow at a pace of 4.9% next year. However, adding volume requires a more efficient distribution of goods and services. Aviation companies are increasingly focusing on the internet in order to be able to provide goods and services at the time and place their customers prefer. At the same time due to the rapidly developing global credit payment system, all payments will be simplified and the non-payment risks will decrease significantly” – comments V. Vorobjovas.

Locatory.com experts predict that due to the correlation between virtually unlimited internet possibilities and aviation growth, 2000 brand new companies are expected to start using aircraft parts’ locator services within the next couple of years. The number of internet users has already grown 4.8 times within the last 10 years, with the biggest increases witnessed in Africa where this number grew 25 times, in the Middle East - 19 times and Latin America - 10 times.

According to V.Vorobjovas, while internet sales are becoming more and more popular all around the world, aviation e-commerce and, in particular, up to three aircraft parts’ locator service providers, will cater for the majority of global aircraft spare parts’ consumers. The anticipated 10 smaller regional locators will be closely linked to these major suppliers.

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