He now faces a new integration with the planned merger between United Technologies (Collins’ parent) and Raytheon. The new company will be called Raytheon Technologies. There’s little he can do until the merger is approved by regulators, except plan internally how to integrate and expand the aftermarket business.
Raytheon represents an “exciting” opportunity, but until the merger is approved, the two companies are prohibited by law from coordinating planning and businesses.
“It’s primarily defense,” Agrawal said. “So far, we really haven’t worked on the aftermarket angle. It’s a little too early to discuss the possibilities.”
$1.5bn in new business
Collins announced $1.5bn in aftermarket services business at the Paris Air Show last month, assembled over a six month period.
“When we came together as Collins, our biggest priority was customers and being able to respond to the customers’ needs,” Agrawal said in an interview with LNA at the air show.
“Our offerings are working,” he said. Agrawal pointed to its predictive maintenance product has picked up steam.
“We continue to expand our predictive maintenance offering, connecting hardware and sensors and avionics buses. From there, you can run the analytics and from there bring predictive value,” he said. “We are maturing all of this connectivity very quickly.
“We are seeing very strong revenue opportunities. When we came together as two companies (Collins and UTC), we knew there would be cost synergies. The revenue synergy side of the equation has real opportunity. We are tracking more than 10 different areas, which will bring in over a billion dollars of revenue over the next five years,” he said.
Collins has made a strategic move into Africa. A partnership with Ethiopian Airlines is for 25 years for maintenance of parts on the Q400 turboprop for its own fleet and as a third party vendor for other African carriers.’ Africa represents $500m in potential revenue over the life of the contact, Agrawal said.
Aftermarket revenue is about $10bn a year.