This agreement positions VSE to provide complementary product and service offerings that support long-term market share gains within attractive customer verticals.
16 April 2021: VSE Aviation has recently signed a USD 1 billion engine accessories distribution agreement for the next 15 years with a global aircraft engine manufacturer. Under the terms of the agreement, VSE Aviation will be the distributor for more than 6,000 flight-critical components used in more than 100 business and general aviation (B&GA) and regional aviation engine platforms. VSE will support customers with both new and exchange components. VSE expects to service more than 5,000 US based aircraft with on-demand, flight-critical components on a 24/7 basis to support scheduled line maintenance and AOG (aircraft on-ground) events.
John Cuomo, President and CEO of VSE Corporation said, “We believe this distribution agreement is transformational for VSE Aviation, building on our partnership with one of the leading global aircraft engine manufacturers serving the business jet and general aviation market. This opportunity leverages our deep distribution and engine accessory repair capabilities across new platforms and more customer accounts, while providing a stable stream of contracted revenue through 2036.”
VSE Aviation will be the first point of contact for B&GA owners, operators and maintenance providers, supplying critical engine components and on-demand part and repair solutions. This agreement positions VSE to provide complementary product and service offerings that support long-term market share gains within attractive customer verticals.
“This partnership affords VSE direct access to business jet owner-operators who value our ability to provide a broad mix of products, accessories and components on a 24/7, on-demand basis,” continued Cuomo. “By moving closer to the operator, we see significant potential to increase our penetration in the B&GA market, while strengthening aftermarket support service levels on behalf of our OEM partner.”
The agreement is expected to commence in second quarter 2021. Once fully implemented, the program is anticipated to generate more than USD 60 million in annual revenue. VSE expects to invest approximately USD56 million in inventory during the initiation of the program to support stable, ongoing customer demand in the field.
“VSE Aviation was selected for this agreement because of our unique value proposition, which combines our proven distribution capabilities and experience managing complex, global supply chains, together with our extensive MRO capabilities,” stated Ben Thomas, VSE Aviation Group President. “This distinctive solution positions us to deliver new accessories to customers in the field, while managing product exchanges historically managed by our OEM partner. We look forward to building upon this OEM relationship while continuing to deliver an exceptional level of service to our customers.”
VSE Corporation is a leading provider of aftermarket distribution and maintenance, repair and overhaul (MRO) services for land, sea and air transportation assets supporting government and commercial markets. This agreement significantly expands their service of both new and existing engine platforms. In conjunction with this OEM partnership, VSE intends to expand its repair capabilities to service additional engine accessory exchange units.
