Home / The 737 aftermarket: will the gamble pay off?

The 737 aftermarket: will the gamble pay off?

2020-09-09 / 3 min

urrently the number of orders for all Boeing 737 versions has passed 11000. As the manufacturer is planning to introduce its 737MAX into service in 2017, this figure is likely to grow considerably. With the record breaking production rates pushing the current generation of these aircraft into premature retirement, more and more aftermarket players are forced to recognize the negative implications of the increasing availability of the used spare parts. However, it seems that the possible design similarities between the current and the upcoming aircraft models may turn the potential disaster into a jackpot.

The in-service fleet of Boeing 737s is currently the largest among airliners, accounting for close to 6000 aircraft. With a record number of almost 3500 B737s waiting to be delivered, the popularity of the model is certainly expected to remain stable. Moreover, the manufacturer has announced that it will increase the production of the model from the current 38 to 47 aircraft in 2017 and as many as 52 aircraft per month in 2019. In other words, the company is expecting a more than 50% increase in aircraft production in less than 10 years. However, currently the growing number of aftermarket players have started to worry about the effects that this process will have on the spare part business.

“The pressure that the growing aircraft production rates are exerting on the aftermarket is increasingly becoming the central topic of discussion amongst aviation industry players. Basically, the problem is that what is normally best for an aircraft manufacturer is not necessarily good news for a spare parts provider,” explains Zilvinas Sadauskas, the CEO of Locatory.com “Naturally, increasing production rates help to reduce unit cost and thus are totally financially justified, especially since aircraft OEMs do not make much money from the aftermarket. However, an increased availability of newer aircraft means faster retirement rates. As a result, the aftermarket becomes filled with spare parts, some of which are low in demand whilst some have partly lost their value.”

The pressure that the growing aircraft production rates are exerting on the aftermarket is increasingly becoming the central topic of discussion amongst aviation industry players

Statistically, the retirement rates of the current generation B737 aircraft are in fact impressive. According to the recent AWIN report, currently almost 40 737NGs at an average age of 12 years have already been forced into a premature retirement with an objective to benefit from the spare parts sales. However, the existing demand might have been overestimated, since the current models are not as old and do not need as much technical attention. Nevertheless, it seems that the manufacturers which have started the mess might also be the ones to provide the solution to the problem.

“While some have been worrying about the shrinking aircraft retirement age, Boeing has repeatedly stated that the 737MAX will be designed so that it could be supported by the existing industry-wide 737 maintenance infrastructure. For example, the manufacturer’s representatives have made it clear that the new model will not require special certification for the MRO providers,” says the CEO of Locatory.com “This means that the 737NGs and 737MAXs are bound to have a quite high level of spare parts commonality, which will automatically straighten out the situation in the aftermarket.”

Certainly, despite the fact that the introduction of the newest member of the 737 family is on schedule, 2017 is relatively far away, and the decisions made during the aircraft design phase can and will bring some new aspects into consideration. However, if a significant amount of parts will migrate from the NG to its younger brother, the ones who are now blamed for causing the deflation in the spares market do share a chance to end up benefiting from the situation, as the value of stocked spares will rise along with the demand.

Share this article:

Recent articles

Leveraging PMA Parts for Cost-Effective and Reliable Aviation Operations

2024-01-25 / 5 min

In the fiercely competitive world of aviation, where every penny counts, airlines are always on the lookout for ways to trim expenses without compromising safety or quality. One of solutions, which is increasingly gaining popularity is the use of Product Maintenance Approval (PMA) parts – non-OEM components approved by the Federal Aviation Administration (FAA) for