One of the key MRO trends over the past decade has been the growing importance of Used Serviceable Material (USM) – also known as Surplus Parts. The past decade saw aircraft acquired, retired, parted-out, and their parts and engines sold to operators and MROs.
The majority of USM is sourced from retired aircraft/engines. Thinking about what types of parts are involved in USM, we should consider parts with a high price or parts with high annual spend (so meaningful savings can be made).
Pricing of USM is highly dynamic (based upon supply and demand), priced against OEM new, and the availability of new OEM material.
But why should we care about USM? Well, USM allows airlines and MROs to reduce material expenditure (e.g., 20-40% cheaper than new parts). However, USM may compete with profitable OEM provisioning rotable spare sales and repairs if USM substitutes for the repair.
OEM participation in USM allows them to gain valuable information on part pricing and availability. It also allows them to serve a price-sensitive customer segment that might not be current customers.
Since airlines are laser-focused on cash conservation, many will evaluate ways of saving money on maintenance, and USM provides one option. #NAVEO #Aerospace #aircraft naveo.com
Date: March 12 , 2021
Reviewing 2020 Aircraft Retirements
So, how many air transport aircraft retired in 2020? Thousands? Nope. 2020 did not yield the thousands of retirements that had been feared. Though the final tally will be subject to revision in the coming months, so f...
Date: January 18 , 2021
Norwegian Air Shuttle Fights for Survival
On the 14th of January, Norwegian Air Shuttle announced plans to focus on short-haul flying and abandon long-haul. Norwegian’s quest for profitability long preceded COVID-19. The restructuring plan calls for 50 nar...
Date: January 12 , 2021
Calmer weather is on the horizon. Outlook for 2021
Aviation leaders tend to be optimists. Each dawn, they believe, promises a new start. The storm clouds will pass, they confidently say. We are lucky that our industry was is full of engineers, strategists, and planner...