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Business as usual

The Satair Group has developed a unique position between OEMs and airlines, and being owned by Airbus will not change the way the company operates
 

Mikkel Bardram, Chief Executive Officer, explains that Satair A/S was founded in Denmark in 1957. It set out to buy airlines’ surplus spare parts and components and then find potential buyers for them around the world. Since then, it has experienced steady growth, with the business changing in the 1990s towards the distribution of brand new parts, following the authorities tightening up on the traceability and certification of spare parts. From 2000 onwards, it has acquired a number of competing companies, making it the largest independent distributor of aircraft parts in the world.

 

The big change occurred in 2011, when Airbus made a voluntary recommended public offer to buy all the shares of Satair, therefore turning it into a wholly owned subsidiary of Airbus. Satair is now part of the Satair Group, a new company that was officially launched on 1 January 2014 as the result of a merger between Satair and Airbus Material & Logistics Management. The Group takes care of the aftermarket for Airbus proprietary parts, employing more than 1,000 personnel worldwide and accumulating over $1 billion in revenue.

 

However, as the former Satair was involved in a wide range of components and aircraft types, including Boeing, it was decided that the business model would remain unchanged, with neutrality providing a competitive advantage. The difference, says Bardram, is that the company now has access to much greater technical knowledge of Airbus aircraft, as well as the ways in which the customers and airlines operate. This enables spares packages to be tailored much more closely to actual needs – a good example of this is the Airbus Managed Inventory (AMI) service, which ensures automatic and continuous replenishment of high-usage and non-repairable parts at the customer’s facilities.

 

In a similar way, the two Group brands, Satair and Airbus, may cooperate with a particular client but the work will be carried out under separate contracts.

 

As a result, the main focus of Satair Group continues to be as an intermediary between the industry and airlines. On the one hand, many manufacturers do not have the resources to track individual airlines, especially those with smaller fleets, or MROs. There is also the complexity of logistics, documentation and e-commerce. A further challenge is the fact that airlines are looking to limit the number of suppliers they deal with; the management of spare parts purchasing is becoming very complex due to the vast quantity of products and the large number of suppliers, as well as the varying delivery times.

 

Bardram says the strength of Satair Group is the ability to remove these problems and allow suppliers, airlines and MROs to focus on their core businesses. At the heart of this is an extensive database, supporting IT systems and highly skilled employees that represents a vast pool of knowledge, built up over time and beyond the capabilities of most customers to maintain. This allows the global sales force to customise their approach to match a client’s needs whilst also representing a range of suppliers simultaneously.

 

A good example is the Integrated Purchasing Programme, in which the company becomes the single point of contact for nearly 290 small and medium-sized manufacturers with the ability to integrate the demand from multiple customers. This both reduces handling cost and improves performance for the customers, while aggregating the demand for the suppliers. Another advantage is that it offers warranty and repair management as a service, both to customers and suppliers. Satair Group has a Repair and Overhaul Service Center located in Singapore, where there is also a spares distribution business and an Airbus Material & Logistics Management facility. By coincidence, he says, both were running out of space around the time of the takeover. The obvious solution was to find a single new location that could be used by both parts support and distribution.  The opening of the 16,700m² Satair Airbus Singapore Centre at the Seletar Aerospace Park in February this year, provided an ideal opportunity to launch the new Satair Group.

 

This facility will become the primary spare parts hub for Satair Group in the region, providing 24/7 support to airlines and MROs. The company already has four AMI customers in the region, the latest being AirAsia for its A320 and A330 fleets in Kuala Lumpur and Bangkok.

 

Inevitably, Satair Group is looking at recovered parts. This is a growing market that the company cannot ignore, says Bardram, but it is part of a policy of moving to manage the entire lifecycle of components. Some tests have already been carried out and more are planned in the near future, with the intention of acquiring additional aircraft. The company’s advantage will be knowing which parts to recover and ensuring consistent quality after refurbishment.


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