In Slumping Economy, Aviall Sees Opportunities in Bizav Segment
The lingering economic downturn has impacted all areas of the aviation industry and has presented challenges for component manufacturers and suppliers. As operators and manufacturers seek to lower costs without compromising component quality, greater emphasis has been placed on the need to diversify operations to offset short-term revenue declines in certain segments. Global supplier Aviall is meeting those challenges with a multi-pronged approach covering various segments of the industry.
A wholly owned Boeing subsidiary, Irving, Texas-based Aviall offers an online catalog with more than two million components from more than 235 aerospace and military OEMs. The company is an exclusive parts supplier for manufacturers including GE Aviation, Rolls-Royce, Pratt & Whitney and Pratt & Whitney Canada, Honeywell and Hamilton Sundstrand.
That level of diversification has helped Aviall weather the recent economic storm, according to executive vice president and COO Ed Dolanski. “We have added significant new product lines and programs to our portfolio each year,” he told AIN. “Our ongoing commitment to inventory availability has ensured we remain a reliable source for aviation products around the globe.”
Aviall (Booth No. 699) separates its aviation related business into three primary categories: business/general aviation, commercial/regional airline and military. The latter category has remained strong for the company throughout the downturn, Dolanski noted, offering a consistent revenue stream. Its defense presence was further bolstered earlier this year with Federal Acquisition Regulation Part 15 approval to compete for certain government contracts.
The company has also seen revenue gains from its product offerings in the commercial airline sector, particularly from agreements with regional carriers. Dolanski tempered his enthusiasm somewhat by noting that European airline sales have declined in some areas, making future performance from that segment more difficult to predict.
“Sales of certain legacy product lines in the commercial airline market have been challenging,” he acknowledged. “To some extent, the challenge is due to reductions in legacy aircraft fleets.” To counter such declines, Dolanski added, Aviall has taken a more proactive approach in working with its suppliers and customers to expand product offerings and better negotiate for lower prices.
Downturn Yields Benefits
In the general aviation segment, the continued global downturn in new aircraft sales appears to have helped Aviall’s performance in supplying aftermarket parts for business and general aviation aircraft, as operators seek cost-effective solutions for necessary repairs and maintenance. “Revenue in the business and general aviation market has continued to grow over the past four years,” Dolanski said. “However, we believe some of our revenue growth is due to market share capture rather than market expansion.”
Aviall has used this opportunity to expand its product offerings for general aviation manufacturers and OEM suppliers. In August, the company entered into an exclusive 10-year distribution agreement with engine maker Rolls-Royce for parts, modules and tools for the RR300 turboshaft that powers the Robinson R66 single turbine helicopter and gained a 10-year extension to an existing support contract for the Rolls-Royce 250A turboshaft.
“A significant portion of our product portfolio has applications on business jets and helicopters,” Dolanski added. “Business aviation is an important market for Aviall. Not unlike our other customer segments, operators demand high-quality customer service, immediate availability, local stocking and original equipment parts, all of which Aviall is prepared to supply.”
In addition to continually expanding its product offerings, the company is also focused on making parts and repair options more readily available to customers worldwide, with a particular emphasis on stocking needed parts close to the customer to reduce shipping and AOG time. It maintains 40 customer service and parts centers throughout North America, Europe and Asia Pacific, as well as 20 FAA-certified repair stations offering battery, wheel and brake repair and overhaul as well as kitting, chemical management and custom paint-mixing services.
“Our customer service locations are positioned near major business aviation centers around the globe,” Dolanski said. Aviall also stocks an extensive inventory of overhauled and serviceable parts, offering a cost-effective option for many components over purchasing new stock.
Dolanski emphasized that the company will continue seeking new business opportunities in the general aviation and bizav markets. “Aviall continues to expand its product portfolio along with increased repair services and rotable assets,” he noted. “The business aviation market has been challenged in recent years, particularly in new aircraft sales, [but] it continues to be a strong, growing market segment for Aviall, and we will continue to add new product lines for business aviation applications. Our unique capabilities align very well with the expectations of business aviation operators and service providers,” he concluded.