As aerospace OEMs have released their quarterly financial results, we are reminded not only of the impact on revenue from painful OE production cuts but also the importance of aftermarket revenue (including spare sales) to profitability.
Operators & MROs typically have three potential alternatives to new OEM parts. They can purchase used serviceable material (USM), they can consider repairing the part (DER repair), or, they could purchase a PMA if one is available and their policies allow. Which option the customer selects depends upon policies, availability of alternatives, cost of the new OEM part, and its availability.
Pre-COVID 2019 Air Transport MRO spend was ~$87B. Of this, ~$35B (40%) was materials, of which ~$5B was USM, and ~$725M PMA. Part repair (DER or OEM-approved), particularly in engine MRO, is ~$6B+ market.
OEMs, MROs, and specialist suppliers understand this so many offer alternatives to new OEM parts to customers looking for choice and cost savings. Given budgets at airlines and MROs are tight and under scrutiny, it makes sense to evaluate potential options to reduce MRO spend. Note, OEMs do repair parts, and in particular, the engine OEMs are some of the biggest consumers of USM incorporating used material into engine overhauls. email@example.com #NAVEO #Aerospace
Date: November 24 , 2020
737NG, 737 MAX, A320ceo & A320neo Family Fleet Status
The great news that the 737 MAX, grounded since March 2019, has received FAA authorization to re-enter US airline service (with other regulators to follow in due-course) provides the opportunity to look at the current...
Date: November 16 , 2020
Air Transport Aircraft Fleet Status (Mid-November 2020)
Let's take a look at the air transport fleet's current active and stored/parked status. As we reach mid-November, ~61% of the fleet is in service, and 39% parked. The regional situation continues to diverge. COVID fat...
Date: November 02 , 2020
Aircraft Retirements up to October 2020
As of the end of October 2020, approximately 540 air transport aircraft had been officially retired and withdrawn from use. That’s ~2.6% of the active fleet. These include ~100 A320ceos, 63 747-400s, 54 MD80s, 40 MD90...