According to straitsresearch.com the global aerospace parts manufacturing market size was valued at USD 754 billion in 2021 and is expected to grow at USD 1130 billion by 2030. The market is expected to grow at a CAGR of 5% during the forecast period (2022–2030).
A Boeing 747-8 is composed of some six million components, and it takes about four months to build an aircraft from its parts. Mindboggling and humongous, considering the amount of work it would take to acquire/rent and stock, repair, and test all the spares that need to be kept ready at the right place to be located at the right time, a solid supply chain, and a foolproof method of stocking, numbering, and tracking are a must-have for any such service provider.
The quickest possible TAT for an AOG (aircraft–on–ground) aircraft the primary goal is thus to keep the time an aircraft spends on the ground as short as possible. Those in charge of the aircraft handle all the tasks that must be completed after landing or before the next take-off with impeccable coordination. On top of this, there are routine maintenance inspections.
Commercial aviation is on a northward growth trajectory with ever-increasing passenger numbers taking to air travel with every passing year. With upwardly mobile individuals, and the pent-up travel demand the aerospace industry needs to develop new aircraft more convenient, fast, and luxurious. With service demands from consumers, a lot of new accessories, components, and parts are added to modern-day aircraft offerings. Each aircraft manufacturer vying with the other to get a bigger slice of the market. This aerospace industry is continuously evolving its aircraft with a lot of new accessories and services that will enable the passenger to have a safe and better traveling experience. The aircraft needs to be refurbished or a completely new-age aircraft to be manufactured to make this happen. For this, various parts are manufactured to cater to the new-age demands of passengers, which is driving the aerospace parts manufacturing industry.
The traditional process of procuring aircraft spare parts can be dragging, given the demand for commercial aircraft, leading to excessive costs, manual handling of work overload, and documentation constraints including locking up valuable capital of airlines, but there is a better way forward thanks to technology.
Aviation is hugely capital intensive, and this challenge is further exacerbated by sliver-thin margins, and the most difficult business to run in the aviation subset is the maintenance, repair, and operations of aircraft. Complex, and yet needs to be organized meticulously, while grappling with curtailment of cost.
What always remains in focus, for an MRO service provider or an airline’s material management is to ensure that the right material is available at the right time.
A Snapshot: Current MRO Ecosystem
And of course, ensuring the safety of passengers is paramount. Therefore, airlines must maintain their fleet under stringent regulatory mandates. This makes aircraft maintenance therefore of paramount importance.
This maintenance can be broadly categorized into Scheduled Maintenance and Non-Scheduled Maintenance. Both types of maintenance require resources and materials to be executed, including aircraft parts.
Ensuring a seamless supply chain for these myriad parts is crucial for the smooth operation and commercial success of an airline. For the cost of an aircraft being non-operational, often referred to as an Aircraft on Ground (AOG) situation due to technical issues, can range from $10,000-20,000 USD to upwards of USD 150,000 after being grounded for just 1-2 hours.
The Role of Traditional Procurement & Logistics
Of all the objectives and reasons above procurement and logistics play a vital role in MRO service delivery, and there is no going away from it. They ensure all types of supplies, including aircraft spares, tooling, test equipment, consumables, and ground support/ground handling equipment – are available on tap.
Typically, aircraft spare parts procurement activity includes – the creation of a purchase indent authorizing the requisition of purchase of aircraft maintenance material. The next step is to categorize them into contracted and non-contracted. A quotation is sought from among the approved / authorised source of suppliers. The most favoured quote is awarded to the supplier of choice, vide an order. This is similar for most industries.
Challenges Faced Due to These Set Methods:
MROs, airlines, and service providers currently have a restricted window, reaching out to limited registered suppliers. Casting a wider net may bring in savings in terms of time and money. Time constraints like delays and oversights have a direct implication on airlines remaining in AOG situations, resulting in huge costs and disruptions leading to passenger dissatisfaction. So, the flow of routine parts and services needs to be streamlined and smooth. Accessing resources through traditional procurement methods amounts to manual monitoring, which means sufficient people resources and the cost incurred, especially when faced with a worldwide shortage of skilled workers. Moreover, bulk buying inventory such as consumables and expendables (C & E), blocks up capital when buying bulk as a precautionary measure. The flip side is that one can end up with excess stock at a high purchasing price.
Ushering in Artificial Intelligence: Parts Procurement
With the advent of artificial intelligence (AI), harnessing the benefits into one’s business has proved to be a boon. There has been a steady and swift adoption of AI in the aerospace MRO domain to circumvent some of the challenges. Such applications have resulted in streamlining processes, thus bringing in efficiencies and better decision-making.
Furthermore, with real-time data and analytics, identification, and mitigation of delays, and buying at better pricing, are significantly beneficial to airlines and MRO operations. Some AI -led Procurement benefits are:
- Integration of maintenance & engineering systems, leading to automation while retrieving part numbers instead of a manual time-consuming effort
- Sourcing within minutes from hundreds of suppliers is made possible with AI, where the best deals can be had. This, versus procuring from a limited list of registered suppliers
- Consolidation and analysis of quotes with AI that can automatically calculate and display the best comparative quotes
- Automated Purchase Order (PO) placements through AI, are generated automatically for Original Equipment Manufacturers (OEMs)
- Tracking of POs and Delay Mitigation through AI is possible in advance, and problem-solving takes place before the threat of operational delays
- Market insights can be generated through AI, giving a clear snapshot of trends, which helps in better and quicker forecasting
With newer technological marvels, the industry players and stakeholders must carefully choose what best suits them, and evolve with the times, to stay ahead of the curve. Business viability may depend on who delivers the fastest and services the best. For the MRO entities, all is well, if costs can be curtailed, without compromising on quality, and above all operational SAFETY.
Leading Global Manufacturing Companies of Aircraft Spares, Rotables, and Logistics Market
Important Region-wise Market Insights around the Globe for Aircraft Spares, Rotables, and Logistics Market
- North America (United States, Canada, and Mexico)
- Europe (Germany, UK, France, Italy, Russia, and Turkey etc.)
- Asia-Pacific (China, Japan, Korea, India, Australia, Indonesia, Thailand, Philippines, Malaysia, and Vietnam)
- South America (Brazil, Argentina, Columbia etc.)
- Middle East and Africa (Saudi Arabia, UAE, Egypt, Nigeria, and South Africa)
In North America, the mature US market will still play an important and leading role. Changes and fluctuations here will have a lasting impact on the rest of the world in the development of Aircraft Spares, Rotables, and Logistics. Technological advances will accelerate and same adopted in the spares and inventory market. The presence of big players in the US/North American market will offer ample growth opportunities in the region.
The European market will play a significant role in the global market, tipped to register a healthy CAGR during the forecast period of 2022 – 2029. Despite competition due to global recovery, investors remain optimistic. Newer investments are expected to enter this region.
Technological innovation and advancement will give insights into consumer behaviour analysis and market dynamics (drivers, restraints, opportunities) and these are crucial elements for an in-depth understanding of this astronomical Aircraft Spares, Rotables, and Logistics market.
Factors driving the growth of the Aircraft Spares, Rotables, and Logistics Market
The ever-growing demand for Commercial and Military aviation is the key driver for growth and sustained demand for Aircraft Spares, Rotables, and Logistics
The market is categorized into Service and Software types, and that held the largest Aircraft Spares, Rotables and Logistics market share in 2022.
