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Maintenance

Moving the market

President and CEO Christopher Whiteside explains how he is shifting his AJW Group to a new business model
 

Although the company has just extended a traditional power-by-the-hour (PBH) agreement with Air Incheon in South Korea to cover two newly acquired Boeing 767-300ERs, he says being a mere provider of aircraft parts is less of the focus for the business today as it concentrates on delivering total supply chain solutions.

Influences for change include consolidation between OEMs, both for airframes and equipment; the determination of those OEMs to grab an ever increasing share of the aftermarket; and a diverse competition. The aim, he says, is to use technology to work more intelligently and more efficiently, enabling a move away from $500 million worth of components sitting in boxes on shelves in expensive warehouses.

Also in the mix are important contracts with easyJet and Bombardier.

The easyJet long-running cost-per-flight-hour contract saw the company become the primary provider of the airline's requirements for component maintenance and the provision, storage and distribution of spare parts, although on a much larger scale than usual. Starting with an initial feet of 241 Airbus A320 Family, new orders will see an eventual total of around 350 aircraft by 2020, including the introduction of A320neos and A321neos.

This resulted in major changes and upgrades to the company’s processes (see MRO Management, June 2017), which have been adopted across the board. In fact, there is now a continuous improvement programme in place, which has seen further IT changes, with tighter KPIs, and more efficient methods being introduced into the warehouse.

Earlier this year, it signed a long-term agreement with Bombardier Business Aircraft, undertaking all rotable inventory repair management across the Learjet, Challenger and Global aircraft families. This is potentially worth in excess of $1 billion across the life of the contract, he says.

A key feature of both these contracts is engagement with MROs and vendors. This has been difficult at times, but the experience gained with the easyJet contract has been useful in setting up the Bombardier network. He notes that some of the bigger OEMs have distinct divisions for the airline and business aviation industries, each with their own gatekeepers that have to be won over. And the AJW Group relationship with big OEMs? He compares the company to an oxpecker bird, which lives on the back of a rhinoceros. Despite the disparity in size, there is a symbiotic relationship.

One competitive advantage for AJW Group is the sheer scale of the repair operation. It can offer OEMs a share of the business over several years, which makes it attractive as a partner. It can also get involved in taking over or selling surplus stock and running sunset programmes, as well as its core inventory management and logistics experience. >>

 


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