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Making the spare parts market more transparent

2020-09-09 / 3 min
Locatory.com partners with Unical Aviation

The current market of aircraft spare parts and components comprises a variety of different types of players acting as suppliers – from airlines, OEMs and PMAs to independent distributors, base operators, salespersons and brokers. However, as the market is geographically very scattered, in some cases access to certain aircraft spares can be quite limited or even impossible.

As a rule, buyers seek to locate a very specific product in the closest proximity of an aircraft. It involves looking through piles of paper catalogues and making numerous inquiries to countless different suppliers. After finally locating the right part or component, they usually place orders to several vendors. Due to these reasons, the market of aircraft spare parts and components remains largely opaque and insular to both buyers and suppliers.

‘Searching for aircraft spares on the Internet is becoming a common practice. I am not saying, though, that there are no more challenges still to overcome. During the recession, many aviation companies feared facing a sudden inability to acquire the required inventory. As a result, they ended up overloading their own warehouses and are now left with large quantities of atypical spares, which sometimes even lack proper documentation. The second issue is the lack of a proper pricing strategy. As neither buyers nor sellers provide any actual price lists, the latter often receive gigantic amounts of RFQs regarding a single product. Processing RFQs is a challenge in itself. It takes a lot of time and some of them even remain unanswered. The final problem is posed by dishonest suppliers. The secondary market of spare parts is overcrowded with small companies that are little-known for the perfect reputation. They will never attempt to join the e-platforms that require maintaining the exceptionally high standards of quality and transparency,’ explained the CEO of Locatory.com Zilvinas Sadauskas.

Searching for aircraft spares on the Internet is becoming a common practice

The increasingly developing internet-based aviation marketplaces ease the communication process between buyers and suppliers which helps to not only reduce the costs of logistics but also solve the problem of no longer needed inventory stock a lot more effectively. Many carriers, such as Turkish Airlines, KLM and others, which do not outsource aircraft technical maintenance services to independent providers, must maintain a certain amount of spares in their own stock. The exact amount is calculated according to the number of flight hours. With new generation aircraft, manufacturers provide a provisioning list containing the detailed information on the quantities of the certain spare parts and components to stock up on. However, most of airlines already maintain a much larger stock of spares than they are required to, mainly because they aim at ensuring the shortest possible down-times due to AOG situations. Another reason for overloaded warehouses is the rapidly renewed fleets. As the old, outdated aircraft are sent to the much-deserved retirement, the previously kept stock of their spares is left to gather dust in the carriers’ warehouses.

‘The process of globalisation keeps intensely changing not only the rules of competition but also the monopolistic structure. Although the OEM market remains the largest, a faster access to information opens new opportunities to all players of the aviation spare parts’ market. For instance, the PMAs may observe and evaluate the actual supply and demand in the given period of time and come up with the list of more attractive alternative solutions. In turn, the OEMs may decide to make contra-offers and so on. Globalisation allows for more competitive market environment which is very beneficial to both airlines and MROs. However, the model of spare parts’ management is highly unpredictable as carriers are still in control of the lion’s share of aviation spare parts and components within the market,’ said Z.Sadauskas.

Despite the globalisation processes, AOG situations remain the main headache source for the players of the aviation spare part’s market. In some cases airlines even have to turn to ‘friends – competitors’ as every hour of unscheduled down-time may cost thousands of dollars as well as a blow to a carrier’s reputation. The use of e-platforms, such as Locatory.com, makes the process of locating the required parts way faster. Moreover, they contribute to a much more transparent market and lower product prices. According to Locatory.com team, transparency is the only condition for the most balanced and mutually beneficial market where both buyers and sellers can compare multiple offers and rest assured with regards to the quality of the listed parts – all with the help of a single, user-friendly online marketplace.

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