Locatory.com: huge and unforeseen saving opportunity for airlines with several divisions on the example of TUIfly

Aug 1st, 2012

For several decades the world’s leading airlines have been uniting under various alliance projects in order to improve customer services and cut the costs related to operations, maintenance, sales, marketing, etc. One of the main advantages for the carriers-members of an alliance is the opportunity to operate joint maintenance facilities and gain access to the joint all-alliance spare parts pool. However, not every airline cooperation project grants comprehensive mutual spare parts support for its members.

The first such cooperation project emerged in 1930, with the Pan Am and Air New Zealand joining forces to serve the Latin American destinations. Today such major airline alliances as Star Alliance, WOW Alliance, SkyTeam, Oneworld and others are characteristic of much more complex forms of interaction and mutual assistance. They facilitate the entire process of procurement thus significantly shortening AOG situations.

‘The entire maintenance network of an alliance is connected by specially developed software designed to ease the maintenance of its members’ aircraft in numerous locations around the world. This is of extreme importance in AOG situations. Should one immediately require a certain part or component, with the help of the internal maintenance software all members can access the spare parts pool of the entire alliance’s fleet’, explained the CEO of Locatory.com Zilvinas Sadauskas.

The development of an even most simple internal supply chain system requires the investment of at least 200 000 euro

However, developing and implementing such solutions requires time as well as money. While the major alliances are financially backed-up by large air companies, smaller cooperation projects have limited financial capabilities to establish a solid joint spare parts pool.

‘The development of an even most simple internal supply chain system requires the investment of at least 200 000 euro. The sum may seem relatively moderate, but since the members of smaller airline groups have moderate financial flows as well, creating a well-developed internal supply system may certainly be not the best option,’ commented Zilvinas Sadauskas.

One of the leading world tour operators – the German TUI – during the past years have developed its own group of airlines, operating from Germany (TUIfly GmbH), Scandinavia TUIfly Nordic), Belgium (Jetairfly), France (Corsairfly), the UK (Thomson Airways), the Netherlands (Arkefly), Morocco (Jet4you), Canada (Sunwing Airlines) and Russia (Metrojet). Seven of those companies operate Boeing 737 and Boeing 767 types of aircraft and three carriers operate Airbus 320/330s. With such a similar fleet structure between the companies, operating a joint supply system helps to significantly cut procurement costs, as well as ease aircraft maintenance during AOG situations.

‘In some cases it is more cost-effective to implement a third-party supply system rather than developing your own. Using certain products may cut the alliance’s costs by 80% as well as save a significant amount of time. But in any case, in today’s highly unstable air travel industry it is vital for carriers to minimize all their expenses and optimize their maintenance procedures in order to keep their business profitable,’ comments Zilvinas Sadauskas.

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