Airbus, Boeing fly into lucrative services market

 

Singapore, May 13: Airbus and Boeing may have built their global success on the back of the transcontinental airliners but they are now eyeing a lucrative if rather less glamorous side of the aviation sector in their battle to dominate the skies — parts and repairs.
While booming demand for air travel across has seen the world’s top plane makers ramp up production, it is the multi-billion-dollar after-sales service market that is taking an increasing amount of their attention.
The aircraft titans are aggressively expanding their presence in the sector, which is dominated by maintenance, repair and overhaul of aircraft but also covers other services, from training to parts supply.
The European and American firms have long done some business in after-sales support, but they are now moving to win greater market share and take on other players like Germany’s Lufthansa Technik and US-based AAR.
“The services market is more lucrative than actual aircraft sales because it has more potential and it covers many different spectrums,” said Shukor Yusof, an analyst with aviation research firm Endau Analytics in Malaysia.
“Boeing and Airbus — they have to be part of it. When you sell an aircraft, it’s in your interest to have a full package of after-market services.”
Boeing predicts that the value of the approximately 41,000 planes that will be delivered worldwide over the next 20 years will be around $6 trillion — while the demand for services to support this fleet will be worth around $8.5 trillion.
In Singapore, Airbus’s wholly-owned subsidiary Satair Group has an 11,000 square metre (118,000 square foot) warehouse to house spare parts.
They are arranged on towering shelves in brown, yellow and orange boxes, and range from a main landing gear for an A380, the world’s biggest passenger plane, worth hundreds of thousands of dollars, to a washer worth one cent.
They can be dispatched from the warehouse — Airbus’s biggest such facility in Asia, and second-biggest in the world — within four hours of receiving an order, with plans to further slash the waiting time.
Airbus, whose revenues from services hit $3.2 billion in 2017, 18 percent higher than the previous year, plans to expand the facility by 8,000 square metres next year.