16 December 2020: COVID-19 has impacted the aviation industry in a way which no one could have foreseen, while airlines are flying less, with lower load factors, aircraft are getting parked and aftermarket Used-Serviceable Material (USM) suppliers such as KG Aircraft Rotables are having to rethink the way in which they serve the market.
KGAR are a subsidiary of Japanese trading company, Kanematsu and together they have invested heavily in recent years into the company. In 2019/2020 they took apart no less than 5 737NG aircraft. This is a trend, which they intend to continue into the future post-pandemic market. In spite of a slowing market they are continuing to look for new teardown candidate aircraft, and massively believe that the 737 & A320 will exit the current situation ahead of the crowd.
Gary Tomkinson, Sales Director for KG Aircraft said: “KGAR are very proud to be part of the Kanematsu group of companies, and with their backing we continue to look at ways in which we can be ready to serve our customers when this current Covid situation has been solved. In recent years, we have proven time and time again of our ability to effectively take aircraft apart and return their valuable USM to the market so that others may continue.
It’s never nice to see aircraft taken to pieces, but we need to understand that without this vital element of the supply chain, some aircraft would simply not have the spares to continue operating. We are continuing our program of aircraft disassembly, and continually review the available assets on the market to find great teardown candidate airframes.”
In order to support airlines emerge from the pandemic hibernation, KGAR have been busy ensuring that their inventory is available worldwide. KGAR have been utilising their network of MRO providers worldwide to recertify components before storing them at one of their 3 warehouses. Currently KGAR have stock on location in the UK, as well as further stock held in Kuala Lumpar to serve the Asian market, and lastly in Florida to provide fast shipments to their customers in the Americas.
Current market climates have shown that the traditional Power-by-Hour (PBH) business model for spares is not always the most cost effective, therefore KGAR has been proactive is ensuring that they have models available to cover lease requirements. Leasing (for certain operators), has proven more successful for KGAR historically, and this is something they are keen to present to the market again.
Gary had this to add “lease packs provide a more flexible solution over PBH contracts in our experience, leasing allows airlines to better forecast their cash flow, it allows for spares on flexible terms and it allows airlines to cover the all up cost of the contract rather than being penalised when business picks up on the better side of COVID-19. KGAR have provided lease packs and PBH programs for 737 operators, and while we still retain the ability to provide both, we feel that the lease pack provides better stability as we return to normal operations.”
