Feb. 13, 2018, © Leeham Co.: Boeing’s drive to dramatically increase its aftermarket business, competing with suppliers or even controlling the parts needed by airlines for maintenance, repair and overhaul operations have a risk, says an industry consultant.
Kevin Michaels, president of AeroDynamics, said Boeing potentially could lose airplane sales if it takes too hard an approach to controlling aftermarket parts.
Michaels appeared at the 2018 annual conference of the Pacific Northwest Aerospace Alliance (PNAA) today in a Seattle suburb.
Boeing wants to increase its share of a trillion-dollar after-market industry to $50bn in 5-10 years, an ambitious goal.
Michaels says airlines already are complaining that their normal suppliers are finding it difficult to get parts that Boeing controls; Boeing wants to sell the parts directly for the revenue and high profit margins, Michaels says. Anecdotal evidence is that Boeing is taking a hit on customer satisfaction in some cases, he says.
In a question on the sidelines of the PNAA conference, Michael said the risk goes beyond customer satisfaction.
Several airlines operate their own maintenance operations for their own fleets and to provide MRO services to other airlines. Among them are Delta Air Lines, Lufthansa, Air France-KLM, Singapore Airlines and several Chinese carriers.
These companies often tie the right to provide MRO services through their technical facilities as a condition to awarding an aircraft order to Boeing, Airbus or the engine OEMs.
It’s well known in the industry that Air France delayed ordering the Airbus A350 because Rolls-Royce refused for more than a year to grant MRO rights for the engines.
Delta is said to have selected the Airbus A321neo in its recent competition over the Boeing 737-10 in part because Pratt & Whitney was more willing than CFM to grant the MRO rights. (Boeing’s trade complaint against Bombardier over the Delta C Series orders was also a reason, market sources say.)
Should Boeing refuse to grant MRO rights for the aftermarket it controls, it risks losing airplane orders to Airbus, Michaels said on the PNAA conference sidelines.