Satair is rapidly expanding its coverage and penetration of the Used Serviceable Material (USM) market and has a strategic ambition to become the market leader for USM over the next few years.
What started several years ago as an initial entry through parting out aircraft for this market, has now developed into a multi-channel operation by Satair as it ramps up its throughput of quality USM to feed a growing market demand.
Satair has in the recent past parted out seven A340s, four A330s and a single A320, but a new -approach in 2018 was the acquisition, through its partnership with VAS Aero Services, of six PW4000 engines for tear-down. Engines are the biggest component of the USM market with some 70% of the surplus market.
This move underlines the ambition of Satair to be a multi-fleet and multi-platform provider. As Sylvain Gorse, Satair’s Project Manager Strategy and Portfolio, puts it: “Our previous focus was on Airbus products and components, but we now want to get across all platforms and engines.”
And Nicolai Hertz, Head of Used Serviceable Material for Satair, adds: “It is important that we are not only Airbus-focussed. We are very eager to get our hands on Boeing assets too for dismantling. We want to do all aircraft because our customers fly multiple aircraft fleets.”
New Strategic focus
Satair’s new strategic to increase the availability of used material now takes several forms, in addition to aircraft and engine parting out.
Strategic sourcing of material is becoming important, either as individual parts or in part packages, for customers. It can even extend to initial provisioning packages where operators may be acquiring more of a similar type of aircraft. Nicolai continues: “We are using strategic sourcing where, with our knowledge of which maintenance activities are coming up in the future, we know what we need to stock and we can go directly to the market up front and source the material.”
Another channel is consignment stocks where airlines or even OEMs can consign used material to Satair for sale. The advantage for the consignee is that Satair’s sales channel can move the stock quite fast if there is market demand for it.
VAS Aero Services supports Satair with servicing, certification, warehousing and distribution of OEM excess parts inventory, consisting of both surplus and used serviceable material.
Sylvain explained: “One of the reasons we work with VAS is that they provide strong multi-aircraft platform expertise. This is a good fit for us since we have identified engines as one of the main growth areas for us and so they can help us with that.” Nicolai adds: “Satair will continue to optimise aircraft life cycle management, including teardown and parts harvesting, to maximize the value of our parts portfolio in the future. So as always we are on the lookout for more teardown candidates in the market to satisfy the demand for used serviceable material among our customers.”
Quality and full traceability is vital. All Airbus proprietary parts come with an EASA Form 1 Certificate, while for non-Airbus material, certificates will come from authorised repair shops and facilities and sometimes also the original OEM. Satair’s strong brand and its close links to Airbus quality, trustworthiness and airworthiness are strong competitive advantages.
Nicolai added: “Customers are really looking more and more for used serviceable material and we want to take advantage of that. But critically, customers also prefer to purchase from providers with high quality standards and full documentation.”
From the customer perspective, dealing with a provider like Satair means they get a much broader range of new and used material products which leads to more cost-efficient solutions and can decrease their maintenance costs. Also, as new parts material for older aircraft may not always be available, Satair and its partners can support customers with used material to eliminate unscheduled downtime.
“It is important that our customers understand they can come to us for any parts and if we don’t stock them we can source them in used serviceable condition,” stated Nicolai, adding, “this gives them more cost-efficient solutions and decreases their maintenance costs. We are also willing to work with them to consign their inventories to us for sale to our customer base.”
Demand for Satair’s used parts comes not just from airlines and MROs but also internally through supporting various Airbus Business Units such as Flight Hour Services and out of production aircraft support.
Satair’s global presence with warehouses located close to customers in different regions and stocking both new and used material is a key advantage, together with the strong ‘one-stop shop’ portal to reach out to customers.
All used parts are visible on the Airbus / Satair portal, alongside new parts. By clicking on to the used part, customers will find full details about the part’s ownership history, repairs and certification status.
This huge ramp is now well underway to grow Satair’s USM offering to the market and support to customers through different revenue streams and as Nicolai puts it: “once those streams start moving we will be well on our way to meet our market leader strategy goal. But to achieve this will require a step-change in our approach to the market to give us the significant growth needed to ensure we are a major player and that we remain so for the long-term.”
The Used parts market
- USM expected to be one of the fastest-growing segments of the worldwide MRO industry – turnover of nearly $6 billion a year will be achieved in the next three years.
- Engine segments represents 70% of the surplus market, with 20% components and 5% airframe parts.
- As new aircraft come into the market, older aircraft will be retired and parked for dismantling. Annual aircraft retirements are expected to reach over 1,000 aircraft per year by 2030.
- Traditionally and historically most used parts sales come from North America and Europe, where older fleets are found.
- However, much stronger demand is now being found in Asia-Pacific and China
What USM material does Satair stock?
- Flight control surfaces, such as elevators, flaps, slats, spoilers, doors and rudders
- Line Replacement Units such as APUs, slides, computers, coffee makers, ovens, sensors and valves
- Engine parts