15 Sep Spare Parts in the Pandemic
Finding new ways
How COVID changed the spare parts business
Over the last two and a half years, the pandemic turned every aspect of our lives upside down, creating many new challenges and opportunities.
One of the most long-lasting effects is, without doubt, the still ongoing disruption of the global supply and demand of production slots that ultimately led to a shortage in production capacity for many components and subcomponents regardless of their complexity, value, or material composition.
Therefore we talked with Matthias Kortschak, the Accountable Manager of PRIMUS AERO, about the changes in the parts business during the past months.
Matthias, since the pandemic is slowly losing its impact on people’s lives and restrictions recede around the globe, how much was the parts business affected by that?
Fortunately, our parts business was not severely affected by the consequences of the pandemic. Although we have faced various ups and downs since March 2020, our services were in high demand, not only in the parts department. For example, caused by a rather immediate effect of the pandemic -travel restrictions- many operators took the opportunity to advance the maintenance of their anyway grounded aircraft. That caused an immediate increase in demand for maintenance services -and therefore also parts. While many businesses or entire industries struggled for weeks with closures, that was indeed not the case for aircraft maintenance providers and their suppliers.
Equally profiting from the situation were shipping companies facing a record high demand due to online shopping. However, those businesses were unprepared to cope with that massive number of shipments. That ultimately led to longer shipping and lead times, higher shipment costs, and so on. Equally profiting from the situation were shipping companies facing a record high demand due to online shopping. However, those businesses were unprepared to cope with that massive number of shipments. That ultimately led to longer shipping and lead times, higher shipment costs, and so on. Although the situation has improved over the last year, it is still not “back to normal”. Especially not on intercontinental shipments as the logistical backbone of many shipping companies was partly eliminated: the available cargo on passenger flights. With the pandemic causing many airlines even to reduce their fleet -including permanently retiring parts of their fleet such as the A380- the worldwide cargo capacity took a deep dive from which it only recovered very slowly. The attempt to use cargo ships and accept significantly longer transit times to deal with the backlog of shipments did not work out well, given the ports’ lack of capacity.
On top of that, Brexit forced many suppliers to restructure themselves, especially concerning customs clearance, resulting in many new challenges. Although we found new ways to get parts from A to B, those new ways might be more expensive than those we could use pre-pandemic.
What are the significant differences now, compared to the situation in, e.g., 2019?
As I already mentioned, to summarize the situation: Higher shipment costs, longer lead times -and what used to be express shipping services are generally non-existing: In 2019, it was an unwritten rule that parts shipments within Europe never took longer than one day, and shipments coming from the US did not take longer than two days – AOG shipments were exceptional cases. Nowadays, it has become the norm that parts will not arrive in that period, making our lives challenging. Additionally, AOG shipments have become more frequent. With fewer parts available and thus higher costs, keeping a stock has become significantly more expensive. For many clients, ordering on short notice became more cost-effective.
Since you already have a certain standing in the spare parts business and PRIMUS AERO is a well-established company not only in this regard, what do you think are the most critical drivers to become successful in that industry? What helped you in the past to grow?
That is an easy-to-answer question: It is the can-do mentality of everyone working at PRIMUS AERO. The key is the right attitude and mindset to contribute to achieving high targets in time.
Generally speaking, what are your thoughts on the future of spare parts procurement focusing on lead times?
Since it’s currently hard to predict any trends, I think the better approach is to take on challenges as they occur. That way, I spend less time thinking or worrying about the future. You have to accept the situation as it is -and deal with it accordingly. “Adapt, improvise, overcome and improve” is an approach that has helped me a lot in this industry, especially during the last two years. With the number of operators we serve and the different requirements we face, you have to find an acceptable way to fulfill the clients’ diverse expectations.
What do you think about the strategy concerning mergers in the aviation industry?
Personally, this strategy of some OEMs is not alarming for now. Of course, they took over some companies a few years ago to tie the customer closer to the manufacturer and keep them within their network. Whether it’s about the service centers or the spare parts, they are trying to close the free market slowly and gain control over the aftermarket on their fleets.
In your opinion, what are the biggest issues for the operators right now?
To put it in a nutshell: The parts prices were increasing and have become more volatile. Besides, some OEMs’ availability and services became less accessible and more complicated than two years ago. Nevertheless, we have always found a way to serve our customers in time or close to the desired deadline.
Since it is always an interesting question – have you set a specific goal concerning the spare parts business?
Generally, I don’t like the wording “goal” because it seems a bit finite – milestones or steps of development would be a better wording. However, to stick to your language, there are a few goals along our journey to support our customers in more aspects of their business over the next few years.
To not give away too many secrets, our path remains exciting, and there are many upcoming things and expansions concerning our capabilities. The best would be to keep yourself posted with our social media channels.
How difficult was it to get a known and trusted provider in this sector?
Essentially, it was always achieved by a group, not by the individual. Say it with a well-known marketing slogan: “Impossible is nothing”. Indeed you have to bring stamina and the right mindset. Still, you must also learn to accept and deal with customer expectations and the provider’s and employees’ possibilities while getting things done in time. Attitude, effort, and some out-of-the-box thinking are the most crucial things an employee has to deliver for the whole team to succeed.
What would be your wish for the industry as a whole?
Since our most valued “asset” is our employees and our success is directly linked to their well-being and efforts, we try to make their duty as exciting and enjoyable as possible. Of course, this is not always possible, because everybody has better and worse days and the job is not always fun. However, I hope there will be more companies that appreciate the human factor more than they’re doing now and are becoming employee-friendlier in the future. Offering a workplace where employees look forward to returning on a Sunday evening rather than cursing the Mondays is underestimated. Customers will always notice our employees’ feelings and attitudes towards their job even if you do not directly tell them. A workplace that creates a positive attitude, a good team spirit, and opportunities to grow and take on new challenges is key to success.
This article was originally published in Aviation Heaven Magazine in June 2022.