RETHINKING SPARES AVAILABILITY

Redefining the optimized component sourcing strategy for the new airline operation and spares aftermarket.

As a consequence of COVID-19 the commercial aviation sector is in a major transition which will result in new airlines, new routes, new scale and nature of operation.  Aircraft are retiring prematurely, distorting aircraft valuations and used serviceable material pricing with significant knock on impact on the aftermarket supply chain cost base.  This will disrupt the current supply models and availability sourcing strategies.  Airlines and their supporting MROs will have to rethink supply strategies that incorporate the use of teardown components from prematurely retired aircraft and the softer aftermarket.

Optimizing Sources of Component Supply

Armac’s RIOsys software solution combined with our inventory planning consultancy services can support airline strategic decision making process to;

1. evaluate the effectiveness of current sourcing model (pool, own, lease, exchange, repair cycle management etc)… and
2. optimize the supply chain and component sourcing strategy to support the new operation incorporating components from surplus aircraft.

The RIOsys software DSS (Decision Support System), configured by our team of analysts and supported by our customer’s business expertise, considers every permutation available.

We have developed a proven process to combine system data with operational forecast scenarios to define the optimized component sourcing strategy for the new operation and market.

Process to Optimize Availability Sourcing Strategy

This process can be accomplished in weeks and will answer critical questions including:

• What is the impact of utilizing teardown aircraft to support the remaining fleet? Is it feasible?  The results may surprise!
• Which aircraft are the best candidates for part-out?
• What sequence and timing for teardown considering availability impact, aircraft NBV and base maintenance cost avoidance?
• What shortages will remain following the teardown of selected aircraft and how should they be addressed via purchase, pool and exchange?
• How can surplus be utilized in a soft trading market to offset repair cost and over what timescale can this be achieved?
• Address uncertainty through sensitivity analysis considering the uncertainty of: future aircraft operation and utilization; part reliability; part fair market (FMV) value fluctuation; supplier and logistics performance.

When the process is completed you will have detailed insights into your operation’s new component availability cost baseline and cashflows under the following headings:

• Shortage CAPEX
• Scrap replacement CAPEX
• Repair cost OPEX avoidance through utilization of teardown surplus
• Exchange costs OPEX and transactional volumes
• New pooling scope flight hour rate OPEX
• The NBV impact of breaking down aircraft and residual value of usable components will be understood.

The analysis will inform the “Make vs. Buy” decision in terms of baseline costs for contract scoping or insourcing.

For further information and customer references please contact us @ info@armacsystems.com or call us on +353 41 213 0330