Aircraft spares e-marketing: when visibility equals profit
Jun 3rd, 2015
The importance of spare parts trade in modern commercial aviation industry cannot be overstated. In fact, data provided by ICF SH&E indicates that the spare parts market has grown by over $5 billion in 12 years’ time, currently accounting for almost a half of the overall MRO market. Moreover, the carriers are increasingly adopting an active surplus materials strategy to become less dependent on the OEMs. In the meantime, according to data, collected by Locatory.com, most industry players are still relying on traditional channels in spare parts trade-related processes. However, this also means remaining blind to new opportunities.
In a market as competitive as aviation, it is obvious that a spare parts trading business has to be especially focused on keeping the margins high enough or making the operations as LEAN as possible. However, according to Locatory.com‘s recent market analysis, while ensuring stable spare parts supply is about the only reliable means of avoiding much of the maintenance-related downtime, many traditional spare parts trade channels are still unable to meet the demand. In fact, when it comes to aviation inventory trade, even such companies as Lufthansa Systems, Aviall, Boeing, Delta Airlines and Volga-Dnepr Airlines are often forced to use various additional marketing services, as well as search for spare parts in online search engines.
“Being incapable of efficiently integrating online search engines in one’s inventory trade processes currently is one of the most obvious obstacles in bringing the aftermarket services to a new level. Nevertheless, while the importance of such solutions is widely recognized, many suppliers are simply unable to create their own online public catalogues, which would be both, up-to-date and visible to potential users via search engines. Moreover, as more and more users are searching for relevant information and spare parts via mobile devices, adoptability to such technologies is becoming a new problem to address,” comments Zilvinas Sadauskas, the CEO of Locatory.com.
In addition, the same problem also presents a significant obstacle for the airlines to gain a piece of the growing surplus parts market pie. The demand for surplus material is a great opportunity for operators not only to utilize their surplus inventory, but also to gain additional revenues. The worth of this market is currently heading towards reaching $6.2 billion in a decade (a significant rise from slightly over $1 billion in 2001) at a rate of about 5.5%, as forecasted by IFC International. In the meantime, the operators’ corporate web-pages are usually optimized for ticket sales only, while their surplus stock remains unutilized in their warehouse.
“Many companies stocking aircraft parts are faced with several problems. Firstly, they do not possess sufficient resources to even identify which parts should be considered as surplus and which should be stored for a longer while. In addition, airlines often lack internal capabilities or fail to find the right niche for selling their surplus MRO parts. Meanwhile, a catalogue tool, integrated in some kind of an online parts trading platform, could present a unique possibility for aviation companies to actually sell their surplus stock by simply gaining more visibility,” says Zilvinas Sadauskas, the CEO of Locatory.com.
Of course, the industry’s reluctance to developing such solutions can be understandable, since it can be a costly endeavour. For instance, according to Locatory.com’s calculations, depending on the region, creation of an effective website, adopted for mobile use and optimized for search engines with a catalogue and an order function, can cost somewhere between $2 000 and $10 000. However, there are alternatives available as well.
“A solution we propose is a catalogue on our trading platform, integrated with a client’s website, but managed and updated by our marketplace’s managers. The process is so fast it is configured in mere 5 minutes, after which it the whole catalogue becomes instantly visible to search engines and other devices. Ultimately, however, whatever solution is chosen, the industry has to recognize it is heading towards a new era, so everyone must become more innovative and flexible to keep up,” concludes Zilvinas Sadauskas, the CEO of Locatory.com.