One of the many complicated and costly challenges of running an airlines is controlling the amount and value of maintenance parts inventory to assure reliable operation of the aircraft fleet.
It’s a tricky balancing act between carrying enough inventories for smooth, continuous, uninterrupted supply of parts and components, and stockpiling too much, which adversely affects maintenance costs.
Airlines have always been able to support their needs by buying from the original equipment manufacturers.
They, for the most part, pay the published price and wait for delivery.
This required sophisticated planning and adds to the pressure to hold more insurance inventory.
Over thirty years ago, the surplus parts aftermarket was born to deal with the oversupply of parts.
The selling airline could reduce their inventory burden and create some funds to purchase more active requirements.
The buying airline fills an immediate need at a cost far below OEM pricing.
This marketplace has grown steadily over the years and has now become a source of supply seriously considered by most airlines around the world.
There is now a constant flow of parts globally to deal with overstocking, obsolete parts, parts removed from an aircraft that may have a high cost of repair, absorbing parts from airlines going out of business, redistributing parts for airlines going through a fleet change and the retirement of older generation aircraft.
It is estimated that the market for surplus aircraft parts is around $3.5 billion and will grow 5% per year for the next decade.
The Surplus Parts market benefits the airlines in two ways.
The market will continue to be an outlet for material not required by the airline and the increase of surplus parts availability will hold down pricing on required spares. Cost control is a key to profitability.
But, if you are in Inventory Control for an airline, now is the time to get into the game. Your spares are losing value every day.