SO WHAT FOR THE FUTURE OF AFTERMARKET?

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By admin November 24, 2010 21:57

SO WHAT FOR THE FUTURE OF AFTERMARKET?

When drug dealers start buying up aircraft en mass then you know that something has happened to the aircraft remarketing sector. Prices of older aircraft being remarketed have fallen through the floor of late with the price of the mighty 747-400 having halved since the start of the fuel price crisis in 20072008. When oil went from the dizzy heights of $48 a barrel to $157 a barrel, only being stopped in the end by the credit crunch, airlines across the globe realized that only modern next generation aircraft could keep them in the black through the long term. This view was compounded by the race to reach emissions targets and the spectre of emissions based taxes within the EU and many APAC nations.

A carbon-trading based aviation sector, which will become a reality within this decade, will render aircraft over 15 to 20 years of age obsolete. On top of this, recent exposure of fuselage cracks in older aircraft will render them virtually uninsurable, another factor that will delete some aircraft types from service.

At this point 12 months ago it could have been argued that cheaper second hand aircraft would see many new markets open up. Africa was being mentioned as a very good destination for many older types. 2010 has however, brought with it a game changing twist. African countries have begun to impose maximum aircraft age ranges in a rush to improve aviation safety as the sector starts to rapidly grow. The FIFA World Cup in South Africa this year showed many African nations that there are high levels of local demand for flights.

So as the second hand aircraft market collapses across the globe as it adjusts to cope with a new lower age range and the average age of aircraft in service leads us to a future where an aircraft in its mid to late teens is common retirement age we have to wonder what effect this adjustment will have on the aftermarket service industry.

MROs for example will have to readjust their forecast models and expectations and concentrate on aftermarket service agreements at the time of aircraft purchase. This is an old tactic that has been undertaken very impressively where lessors are concerned but MROs will need to develop far closer relationships with some of the APAC region airlines if they are to survive the next decade without having to merge.

admin
By admin November 24, 2010 21:57
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