Industry Issue

Growing competition in the aerospace MRO market.

nManufacturers (OEMs) are entering the after sales market, since A/C sales reached their peak 1998 and growing competition is reducing the margins.

nDue to deregulation, airlines have to redefine and rethink core functions. Cost efficiency is the key driver.
=> In-house vs. Outsourcing vs. Independent Business Unit

 Study by Frost & Sullivan:
Marketplace is moving into ‘strongest will survive’ mode.

nCommercial market for MRO remains dominated by airlines

nOEMs will dominate the engine maintenance market

nNiche areas will emerge for small to mid-size companies

 Service providers (especially the OEMs) enhance their service offering to a total life cycle product support (‘craddle to grave’), trying to tie their customers closer to them.

 According to Frost & Sullivan the maintenance service will transform into ‘Logistics Management’, where service providers will eventually operate the fleet for their customers (vertical integration).

 Service providers are investigating how the internet can be used to expand their service offerings, leveraging the market potential.